NEW YORK—Data services and convergence are the key to Sprint Nextel Corp.’s future, Chief Executive Officer Gary Forsee made clear at the company’s annual analyst meeting. Forsee argued that Sprint Nextel’s partnership with cable companies and its relationships with multiple mobile virtual network operators put it at a competitive advantage as the telecom industry faces a saturating wireless market and competition from new technologies and new players.
“We have a vast array of competitive differentiators,” said Forsee in a company statement. “We believe our cable joint venture will provide a significant new avenue for customer growth and a substantial time-to-market lead in the race to provide bundled service offerings. Taken together, we are better positioned than any company to take advantage of what we see as a huge opportunity ahead for mobility and data services.”
Sprint Nextel faces a busy year, with the first fruits of its cable company joint venture expected to go to market in the third quarter and a dual-mode CDMA/iDEN handset to be launched in the fourth quarter. Sprint Nextel’s recently spun-off wireline operation, dubbed Embarq, is scheduled to begin operations as a new company in the second quarter. In addition, the carrier has to absorb the affiliates that it has already purchased or is in the process of acquiring, such as Nextel Partners Inc. Analysts also expect the few remaining affiliates to be snapped up within the next few months.
The carrier reiterated its financial guidance of at least $41 billion in consolidated revenues for 2006, which assumes high single digit to low double digit growth in wireless. Sprint Nextel expects to spend about $6.3 billion in capital expenditures, including $600 million for re-banding 800 MHz spectrum this year. In total, the operator expects to spend $1.4 billion on re-banding. The other $800 million “primarily will be recorded as spectrum assets,” the company reported. Sprint Nextel’s guidance did not include results for Nextel Partners.
