Sprint Says Splitting Up Would Be A Nightmare

By Crayton Harrison

March 12 (Bloomberg) -- Sprint Nextel Corp., the wireless carrier formed by the merger of Sprint Corp. and Nextel Communications Inc. in 2005, couldn't easily be split up again, Chief Network Officer Kathy Walker said.

Separating operations would take longer than the integration of Nextel, Walker said today at a Bear Stearns conference in Palm Beach, Florida. Sprint has trained technicians to work on both companies' technologies and has combined network-monitoring operations, she said.

About 1.2 million users canceled their contracts with Sprint last year, complaining about poor customer service and dropped calls. The former Nextel network made up about one-third of Sprint's customers at the end of last year, compared with about 40 percent when the companies combined.

``With everything we've done, it'd probably take longer to undo it,'' Walker said, responding to a question about what it would take to split up. ``Taking that integration plan and reverse-engineering it would be the way we would look at it.''

Sprint, the third-biggest U.S. mobile-phone service provider, fell 10 cents to $6.07 at 1:04 p.m. in New York Stock Exchange composite trading. The shares had dropped 53 percent this year before today.

While Sprint has integrated many of its operations with Nextel's, it still runs networks that don't overlap much, Walker said. Sprint, based in Overland Park, Kansas, has combined network technology in about one-tenth of its wireless sites, with the rest dedicated solely to one system or the other for logistical reasons such as space limitations, she said.

No Buyers

Selling the former Nextel network would be difficult because there are no buyers, Lehman Brothers analyst Thomas Seitz said last month in a research note.

``We cannot think of a scenario where someone would want to re-enter the market as a fifth national player and heat up what is already a very competitive market,'' said Seitz, who is based in Washington and expects Sprint shares to perform in line with the broader market.

Instead of breaking up the company or shutting down the Nextel network, Sprint should try to stem subscriber losses to boost its share price, Seitz said.

Sprint may detail spending plans for a new network called Xohm when the company reports first-quarter results, Kurt Fawkes, vice president for investor relations, said today. The network will offer faster Internet connections for applications such as music and video downloads.

The company scrapped an agreement last year with Clearwire Corp. to share costs to build a network that would have reached as many as 100 million people. Paul Saleh, who stepped down as chief financial officer in January, said in December that the company could spin off Xohm, seeking outside investors to reduce the cost of building it.