Could the Sprint Nextel (S) merger be undone - from a technical perspective?
An iDEN spin would be complex, but it would still be achievable with competent people in charge, and not as difficult as projected, given the relative lack of integration between the iDEN and CDMA networks.
Kathy Walker, Chief Network Officer, is quoted in the Washington Post article "Sprint Merger Would Be Hard to Undo, Officer Says" saying "With everything we've done, it'd probably take longer to undo it." This quote took the headlines from the publicly available Bear Stearns conference that took place on March 12, 2008.
If you listen to the whole event, though, you get a different picture of the level of integration that has taken place between the iDEN and CDMA networks. On a cell site collocation basis, Ms. Walker indicated that, to date, only 10% of iDEN and CDMA cell sites had been collocated. Furthermore, she said that it turned out that the costs of collocating existing sites was much higher than anticipated, so, a significant percentage of those 10% of collocated sites were for new construction. This matter-of-fact response, if accurate, calls into question one of the major drivers for the justification for the original $12B savings claim that would result from the Sprint and Nextel merger, that is, collocation savings. As such, if less than 10% of existing sites are currently collocated, then there has been public disclosure at least through this media conference of why the original projected cost savings were never realized.
Next, in response to another question on just what had been integrated between the two networks, Ms. Walker cited the following items: voice mail, messaging platforms, billing and field technical support. Generally, from a network element perspective, these are all generic, standard interface, technology independent platforms, and, with the exception of the billing platform, a relatively low proportion of total network value.
Since there have been limited cell site collocations, the opportunity to leverage backhaul over a single transport pipe also appears to have been limited. The big ticket network items, namely, switches, HLRs, base stations, BSCs, OMCs for each technology were disclosed to be operating separately.
So, besides the largely peripheral or secondary, standardized network elements just mentioned to be "merged," Sprint has at least managed after more than two years to have implemented a single physical Network Operations Center, or NOC.
A footnote on the merged field technical support staff: it was disclosed that, in large markets, the technical support people likely retained their specialization of either iDEN or CDMA technologies. Thus the cross-training of field staff has likely only occurred in secondary markets.
How hard would it be to split off iDEN in the case of a spin-off? Probably not as hard as the Washington Post article or Sprint indicates. The major tasks needed, in addition to recreating headquarters, sales, customer care and retail functions, would be: augmenting technical support, building a new NOC, planning for an HLR and billing system cutover, procuring ancillary network elements or reverting to existing ones, and, or course, negotiating procurement and support agreements with vendors and partners.
Conclusion
To be sure, an iDEN spin would be complex, but it would still be achievable with competent people in charge, and, from a hardware point of view, not as difficult as projected, given the relative lack of integration between the iDEN and CDMA networks.
