Pin Drop?

The rumor mill is running on Wall Street, and right now it is milling over Kansas City. The current rumor is that a deal between Sprint and Nextel is in the works. What does this mean, I don't know, in fact nobody knows. So far neither company has commented on the rumor, but every time Sprint sneezes all of Kansas City thinks it is coming down with a cold.

There are a lot of ways this deal could work out, unfortunately a lot of them could be bad for Kansas City. The reasoning for the deal seems kind of weak, but that doesn't mean that it won't happen. Sprint is the third largest wireless carrier in the United States, Nextel is number five. However Nextel has the highest per customer revenue in the industry, for some reason people, specifically businesses, pay more for those irritating beeping walkie-talkie phones.

While this deal would supposedly be a "merger of equals", in most cases one company is a little more equal, and the jobs end up on their corporate campus. Sprint is one of about five to ten reasonably sized companies that call Kansas City home and the loss of Sprint revenue would be a disaster for Kansas City.

However there are a lot of reasons this deal might not happen including the terrible quality of the current Nextel network and the fact that Nextel is planning on building a new network in the next couple of years because public services will be getting the radio band that Nextel currently uses. This means that Nextel doesn't bring any network assets to the deal, it also means that Nextel will be forced to use a new (unproven) radio technology for their push to talk feature, a feature that Verizon is already copying and Sprint already has plans to copy. This may mean that some of their lucrative business customers may be up for grabs.

After all, who knows maybe Sprint will end up the "more equal" of the two and this will be a good thing, I guess we will just have to keep our ear to the rumor mill to see how this one turns out.

Timothy Burger