Private Equity Firms Interested in Buying Sprint Nextel's IDEN Network

Sprint Nextel is attracting interest from private equity firms who are reported to be interested in taking control of the company's iDEN network. The company has confirmed that it would consider a sale, but that no specific activity is currently being carried out.

Citing sources, mergermarket, via the Financial Times, it is thought that the interested private equity firms could have included AlltelĂ's previous owners TPG Capital and GS Capital Partners. Former Nextel CEO Tim Donahue is thought to have joined with one of the firms.

However, Sprint Nextel has spent a significant amount of effort combining aspects of the back-end of its two incompatible CDMA and iDEN networks - so a sale would have to either involve a splitting off of the networks, or an agreement to lease some of the back-end platforms from Sprint.

The industry source and one analyst estimated the price of the iDEN network as between US$5 billion and US$6 billion - considerably lower than the US$35 billion which was originally paid.

Deutsche Telekom was rumoured earlier this year to be eying a possible takeover of Sprint Nextel. At the time it was felt that a network operating on CDMA, GSM and iDEN would prove problematic and that the iDEN section would be likely to be sold off. The existence of a possible group waiting to take the network off its hands may resurrect interest from companies who are only interested in the CDMA network.

Sprint is also distracted at the moment with its WiMAX network rollout.

On the web: Financial Times

Posted to the site on 30th September 2008