iDEN suitors in the frame, says Sprint Nextel CEO

Dan Hesse, Sprint Nextel CEO, says there is “significant interest” in Nextel from potential buyers. Nextel, which runs the push-to-talk iDEN network – a proprietary technology from Motorola – was purchased by Sprint in 2005.

Speaking at the launch of WiMAX-embedded laptops for Xohm, the WiMAX business unit of Sprint, Hesse added that the harsh economic climate would make a sale difficult, particularly if the buyer in question was looking to drum up cash on the money markets.

Rumours of a Nextel sell-off by Sprint have been swirling in earnest for a number of months. In addition to a range of private equity firms, one named Nextel suitor is NII Holdings (formerly the international operations arm of Nextel), which uses Motorola’s iDEN kit in Latin America, including Mexico, Argentina, Peru, Brazil and Chile.

Analysts from Barclays Capital are sceptical, however, that NII’s overtures are sincere. “We think NII’s interest in Nextel is solely related to its desire to strengthen its bargaining position with Motorola for iDEN support/equipment, so NII may not be a serious bidder,” they write in a research note. “There are limited synergies and the company has a full plate in  Latin America.”

Sprint purchased Nextel for $36bn, but it is believed that the mobile operator would start to consider bids as low as $5.4bn for its iDEN business unit. Nextel’s reputation for poor customer support, along with an ageing iDEN network and Sprint Nextel’s mounting debt (around $24bn) have all combined to drive down Nextel’s value.