[December 15, 2004]

Cellular Networks Condense

It seems that cellular networks are starting to condense. After the super exposed, multiple billion-valued BellSouth-SBC�s Cingular Wireless (news) & AT&T Wireless merger, there have been talks about Sprint PCS and Nextel possibly bundling their networks, as well are Sprint�s affiliate Alamosa Holdings, Inc. with AirGate PCS, Inc.

It has been reported that as the rumor spreads, the transaction is currently in the works, and might even be a done deal sooner than we think. It has even been rumored that Sprint (news - alert) might get Nextel shares for a mere 1.3 shares of its own in addition of an unknown cash amount. Industry heads say that the deal is so close to be completed, that it only needs to be approved by Sprint�s board of directors for it to be announced publicly.

And we are talking about a multi-billion dollar deal here, ladies and gentlemen! When, and if the deal is approved, completed, and announced, Sprint will have a whopping total of a little less than 40 million customers. This deal will definitely save a space for Sprint in the cellular carrier kingdom currently dominated by Verizon Wireless, Cingular Wireless and T-Mobile.

Nextel�s �walkie-talkie� �enabled phones seem to be a great added asset to Sprint PCS service plans offering. It would also open up Nextel�s market reach to regions like Puerto Rico, and other non- continental US possessions.

As the cellular market condenses, there is a growing competition amongst carriers wanting to acquire each other. The competition within the space is so brutal, that Sprint might not even be able to complete the deal. Feisty Vodafone has also been reportedly competing with Sprint to acquire Nextel. The aggressive warrior was said to be outbid by Cingular Wireless when it tried to but AT&T Wireless a few months ago.

I can�t even imagine the kind of commotion the worldwide adoption of VoIP will cause in the wireless world. The development of cellular/WiFi hybrid mobile devices will definitely create a competitive chaos in the telecom industry. It will be interesting to see if this future competitive environment between both industry will create some serious money saving opportunities for mobile customers around the US, and of course other markets around the globe.