Long-standing speculation that US mobile operator Sprint Nextel may be looking to offload its iDEN network has heightened this week following a Financial Times (FT) report claiming the network has attracted private equity interest. The report (originated via mergermarket.com) links private-equity firms TPG Capital and GS Capital Partners with the business, and claims that former Nextel CEO Tim Donahue has aligned himself with one of the firms. Meanwhile, in a brief interview, Sprint CEO Dan Hesse confirmed the operator has “tested” buyer interest in its iDEN network but has not begun a formal auction.
Sprint acquired the network in 2005 as part of its US$35 billion acquisition of Nextel and subsequently worked to integrate it with its existing CDMA network. According to the FT report, one analyst values the iDEN network at between US$5 billion and US$6 billion, but the report notes that potential buyers have encountered issues separating iDEN from Sprint’s CDMA network. “It’s not clear what a customer is getting,” said Thomas Watts, an analyst at Cowen & Co. “Sprint’s been moving customers from iDEN onto its own network. It’s integrated iDEN’s billing and backhaul functions with its own. A buyer could be getting spectrum and radios, but even if it is, it would be purchasing antiquated technology.” Meanwhile, a Sprint spokesperson said the operator considered iDEN “core” and “remained committed” to it.