It was only two weeks ago that Sprint said it would in fact rejuvenate the Nextel network rather than sell it. Now a court has given them 12 months to shut it down in 81 markets mostly in the Midwest due to conflicts in their affiliate agreement with iPCS. Even assuming that Sprint manages to delay this brings up the obvious question, how do you rejuvenate a network that you have been ordered to shut off?
It’s quite a position they are in. They can’t sell Nextel because the buyers can’t raise money in this market. They can’t easily buy iPCS as they did many other such resellers because their financial position is not strong enough to do it without help from the credit markets, which is obviously not forthcoming. So they have to keep it, but they can’t keep it. They want to rejuvenate it, but have been told to shut it off. It took serious talent to get into this Gordian Knot, someone had better find the guy with the sword.
But does iPCS really want to further damage the position of the company they partner with? Sprint’s stock has been in a tailspin, closing Friday at $2.34 and a marketcap of just $6.57B. By now we’re used to seeing the riskier nexgen fiber companies losing 90% or more of their value in this economic disaster, but to see Sprint, which traded just 18 months ago at above $23, getting hammered like this – it’s just amazing to watch. You have feel that Sprint and iPCS will come to some arrangement this winter, one way or another.
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