Nextel and Sprint Announce Merger

OVERLAND PARK, Kan., and RESTON, Va. – Sprint and Nextel Communications today announced that their boards of directors have unanimously approved a definitive agreement for a merger of equals. The combination will allow the companies to offer consumer, business and government customers new broadband wireless and integrated communications services. The new company, which will be called Sprint Nextel, also intends to spin off to its shareholders Sprint’s local telecommunications business following the merger.

Sprint and Nextel currently have a combined total equity value of approximately $70 billion and serve more than 35 million wireless subscribers on their networks and 5 million additional subscribers through affiliates and partners. The two companies, along with their affiliates and partners, operate networks that directly cover nearly 262 million people, more of the U.S. population than any other carrier.
 
The new company will have a balanced mix of consumer, business and government customers. Sprint Nextel’s service offerings position the new company in several fast-growing market segments including mobile data and push-to-talk services. Additionally, Sprint’s global Internet network will allow the new company to provide differentiated communications solutions through integrated applications for business and government and new broadband wireless services for consumers.
 
Total pro forma revenue for the year ended Sept. 30 for Sprint Nextel were approximately $40 billion, which includes approximately $6 billion in revenue generated by the local telecommunications business. Sprint and Nextel are being valued equally in the merger and their shareholders will each own approximately 50 percent of the new company after the merger.

Sprint Nextel will have its executive headquarters in Reston, Va., and its operational headquarters in Overland Park, Kan. The new company’s common stock will be listed on the New York Stock Exchange. The merger is expected to close in the second half of 2005 and is subject to shareholder and regulatory approvals, as well as other customary closing conditions.

“This merger positions Sprint Nextel for greater success than either company could have achieved alone,” said Gary Forsee, current chairman and CEO of Sprint and future president and CEO of Sprint Nextel. “The combination of Sprint and Nextel builds strength on strength. It will be a dynamic next-generation communications company, the provider of choice for businesses, government and consumers, and the only U.S. primarily wireless investment opportunity. Nextel is recognized as a leader in profitability, customer loyalty, revenue per customer, push-to-talk and marketing to businesses and government. Sprint excels in the consumer business and in providing advanced wireless data services and global IP voice and data networks. Together, we will be positioned to provide the high-value, integrated communications solutions customers increasingly demand.”

Timothy Donahue, current president and CEO of Nextel, will become chairman of the new company. “We are confident that Sprint Nextel will generate efficiencies that will benefit customers, shareholders and employees,” Donahue said. “The new company will capitalize on its leadership position in key growth areas, unmatched asset mix, clear technology migration path, brand strength, innovative products and services and talented employees. We share compatible cultures built on traditions of innovation and competitiveness. We will have the resources to develop and deploy compelling, differentiated services by unleashing the combined strengths of the two companies, each of which is recognized as a product and network innovator. This is a pro-competitive combination that will provide customer choice and create exciting new opportunities for all of our constituencies.”

For a full press release, including information on Sprint Nextel financials, corporate structure and network capabilities, visit www.nextel.com or www.sprint.com.