Sprint/Nextel Merger Puts Samsung in Top Spot
Dec 15, 2004
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The marriage of Sprint PCS and Nextel will hand the number one spot in the U.S. handset market to Samsung, according to new analysis from Strategy Analytics.

The Newton, MA, U.S. research firm says the merger will have a major affect the U.S. wireless market, resulting in the following:

  • The creation of a stronger No. 3 carrier in the U.S. -- Sprint/Nextel -- with 35 million subscribers and average revenues 25 percent above either Cingular or Verizon Wireless. Verizon Wireless will still generate more EBITDA than any other carrier and, as such, is unlikely to counter with a Sprint PCS bid at any price.
  • Improved medium-term prospects for CDMA vendors in the U.S. -- Sanyo and Samsung are the big winners, and given their strong relationships with Sprint PCS; extra volume for Samsung will be enough to push it into a market share leadership position.
  • A bleak outlook for Motorola and Flarion -- The loss of Motorola's biggest iDEN account in the medium term and a downgrading of prospects for Flarion's Flash-OFDM technology at Nextel represent a major blow to both parties.
  • Problems for T-Mobile USA, now in a very distant fourth place in the market. The 2-year wait on its W-CDMA deployment looks like an increasingly risky decision as three 3G mega-carriers chase high-speed multimedia business. No obvious merger partners exist to change this for them.

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