Sprint recently announced its plan to invest US$35 million in acquisition of Nextel Communications, in a move that will give rise to the third largest vendor in the US mobile services market. Called Sprint Nextel, the new company will form an aggregate customer base of more than 35 million.

 

By combining back-end systems and streamlining redundancies, the two US-based companies expect to save approximately $12 billion. More importantly, Sprint will gain access to Nextel's push-to-talk business while Nextel will be able to leverage Sprint's network.  

 

In addition, after the deal is finalized in the second half of 2005, Sprint will also spin off its local-phone service and retain the long-distance business.

 

Currently, the two largest wireless players in the US are Cingular and Verizon, with respective subscriber base reaching 47 million and 42 million. Coupled with Sprint Nextel, the three are expected to cover the bulk of the US  mobile communications traffic.