Nextel told to divest in Midwest
By Andrew Harris
Wednesday, August 16, 2006
Sprint Nextel Corp., the nation's third-biggest mobile phone
service provider, must divest its Nextel operations in
Illinois, Michigan, Iowa and parts of Nebraska, an Illinois
judge ruled after a 25-day trial.
Cook County Circuit Judge Thomas Quinn in Chicago found last
year's Nextel-Sprint merger violated Sprint's exclusive
management agreement with iPCS Inc., the Sprint affiliate
serving the states affected by his ruling.
''Sprint agreed not to 'own, operate, build or manage
another wireless mobility communications network' in the
service area,'' Quinn said. ''Through its acquisition of
Nextel it now owns, operates and manages a competing
network.'' He gave Sprint until Sept. 6 to file a
divestiture plan with the court.
Sprint Nextel, formed last year in a $36 billion deal,
reported $34.7 billion in 2005 sales. Schaumburg-based iPCS
had $280 million in sales last year and a $50.9 million net
loss. On Aug. 4, a Delaware judge ruled that Sprint Nextel
could not use its brands and trademarks in territory
controlled by two iPCS affiliates there.
''We are planning to pursue an appeal vigorously,'' Sprint
Nextel spokeswoman Jennifer Walsh said of the Chicago
In the Delaware case, iPCS affiliates Horizon Personal
Communications Inc., and Bright Personal Communications
Services LLC dropped their claim that Sprint Nextel's use of
Nextel's products violated exclusivity agreements after they
had spent about $300 million to expand Sprint's network.
In contrast, Quinn's Chicago decision said, ''plaintiff
would never have spent over $300 million in construction
costs unless it was assured that there would be no
competition from defendants in the service area.''