Sprint - Nextel 2005 Annual Report Download - page 13

States and to and from Hawaii, and, through agreements with other iDEN-based providers, to and from selected
markets in Canada, Latin America and Mexico, as well as a variety of digital wireless mobile telephone and
wireless data transmission services.
We are one of the nation’s largest providers of long distance services and one of the largest carriers of Internet
traffic. We operate an all-digital long distance and Tier 1, Internet Protocol, or IP, network, over which we
provide a broad suite of wireline communications services targeted to domestic business and residential
customers, multinational corporations and other communications companies. These services include domestic
and international voice, data communications using various protocols such as multi-protocol label switching, or
MPLS, technologies, IP, asynchronous transfer mode, or ATM, and frame relay, and managed network services.
We also provide switching and back office services to cable companies, which enable them to provide local and
long distance telephone service over their cable facilities.
We also provide regulated local exchange telephone services to approximately 7.4 million access lines in our
local service territories in 18 states. We provide local and long distance voice and data services, including digital
subscriber line, or DSL, services, and other telecommunications-related services to customers in these service
areas. We also operate a wholesale product distribution business. As discussed below, we plan to spin-off these
operations to our shareholders in 2006.
Our Series 1 voting common stock trades on the New York Stock Exchange, or NYSE, under the symbol “S”.
Sprint-Nextel Merger
On August 12, 2005, a subsidiary of ours merged with Nextel and, as a result, we acquired Nextel. The aggregate
consideration paid for the merger was approximately $37.8 billion, which consisted of $969 million in cash and
1.452 billion shares of Sprint Nextel voting and non-voting common stock, or $0.84629198 in cash and
1.26750218 shares of Sprint Nextel stock in exchange for each then-outstanding share of Nextel stock.
We merged with Nextel to secure a number of potential strategic and financial benefits, including:
• the combination of extensive network and spectrum assets, which enables us to offer consumers,
businesses and government agencies a wide array of broadband wireless and integrated communications
services;
• the combination of Nextel’s strength in business and government wireless services with our position in
consumer wireless and data services, including services supported by our global IP network, which
enables us to serve a broader customer base;
• the size and scale of the combined company, which is comparable to that of our two largest competitors, is
expected to enable more operating efficiencies than either company could achieve on its own; and
• the ability to position us strategically in the fastest growing areas of the communications industry.
We expect to realize significant synergies associated with this merger, which include:
• revenue and subscriber synergies primarily arising out of cross-selling opportunities and the accelerated
deployment of new features and services;
• reduced capital spending due to the elimination of the need to build a data overlay network as had been
planned by Nextel, reduced construction costs, expected volume discounts and benefits of increased
purchasing capacity and reduced and consolidated facilities and back-office functions;
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