Sprint Nextel’s chief executive Dan Hesse has revealed that it has received ‘significant interest’ from firms interested in acquiring his company’s iDEN network. He admitted, however, that prevailing market conditions would make it extremely difficult for any potential purchaser to raise capital for the deal. Sprint paid USD36 billion for Nextel Communications and its digital trunking iDEN network in 2005 but has struggled since then to integrate the arm with its own operations. Speculation about a possible sale or spin-off of the Nextel unit first surfaced a year ago, after Gary Forsee, Sprint’s former chief executive, was forced out by the board. More recently there has been speculation that Nextel might be sold to a consortium comprising private equity interests for about USD5 billion, although most analysts have suggested such a deal was unlikely in the current credit environment.
Despite the credit crunch, Mr Hesse said he remained optimistic about closing a separate deal with Clearwire. The pair announced plans earlier this year to fold their WiMAX operations into a new company which will also be called Clearwire but will be 51% owned by Sprint Nextel. Under the agreement, which has yet to receive regulatory approval, a group of investors led by Comcast, Time Warner Cable, Intel and Google, plan to invest an additional USD3.2 billion in the venture.
‘We believe that when the time comes, the markets will be more open and we’ll be able to raise it [the funding],’ Hess said, adding that the venture’s partners have strong enough balance sheets to help out if needed.