Sprint Suffers Legal Defeat To Affiliate IPCS

NEW YORK -(Dow Jones)- Sprint Nextel hit a roadblock in its push of the Nextel brand in the territory served by IPCS Inc. after the affiliate scored a legal victory against Sprint.

Circuit Judge Thomas P. Quinn of Cook County, Ill., ruled that Sprint's operation of the Nextel network in IPCS's region violates its exclusive right to "own, operate, build or manage" the Sprint PCS network in its territory. As a result, Sprint can't operate the Nextel network in those areas.

Sprint spokeswoman Jennifer Walsh said the company plans to appeal the ruling. "The court itself recognizes that an appeal of its decision is going to be forthcoming," she said.

The ruling follows a similar opinion issued by the Delaware Court of Chancery, in a case filed by IPCS units Horizon and Bright. In that case, however, Sprint declared a partial victory in that it would be able to maintain Nextel stores in their regions, although they would be distinguished from the existing affiliate-run Sprint stores.

IPCS and its units serve 80 markets in Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee.

Sprint, Reston, Va., has been caught up with legal battles since its merger with Nextel Communications last year. The No. 3 U.S. wireless provider's 10 affiliates balked at the notion of competing with the Nextel brand in their territories.

Sprint has managed to acquire seven of them, but three remain. In addition to IPCS, privately held Shentel Telecommunications Co. and Swiftel Communications are also still holdouts and are working under a forbearance agreement.

Sprint's stock recently traded down 19 cents, or 1.1%, to $16.28. IPCS' shares rose $2.46, or 5.4%, to $48.15.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 15th August 2006