Sprint - Nextel 2005 Annual Report Download - page 17

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We also offer wholesale services on our CDMA network to resellers, commonly known as mobile virtual
network operators, or MVNOs. MVNOs purchase wireless services from us at wholesale rates and resell the
services to their customers under their own brand names. These companies bear the costs of acquisition, billing
and customer service. We currently provide wholesale services, through multi-year, exclusive wholesale
agreements, to a number to MVNOs, including Qwest Communications International, Inc., Disney and ESPN.
We also provide wholesale services to Virgin Mobile USA, which offers prepaid wireless service targeted to the
youth and prepaid markets, and is a joint venture between us and the Virgin Group. As of December 31, 2005,
the number of subscribers served through resellers represented approximately 18% of the total subscribers served
by our CDMA network.
We offer customized design, development, implementation and support services for wireless services provided to
large companies and government agencies. We also recently entered into a joint venture with several cable
companies to develop converged next generation products for consumers designed to combine many of cable’s
core products and interactive features with wireless technology to deliver a broad range of services, including
video, wireless voice and data services, high speed Internet and cable phone service.
Sales and Marketing
We focus the marketing and sales of wireless services on two targeted groups of customers: individuals, and
businesses and government agencies. We offer a variety of pricing options and plans, including plans designed
specifically for business customers, and individuals and families. We use a variety of sales channels to attract
new subscribers of wireless services, including:
• direct sales representatives whose efforts are focused on marketing and selling CDMA- and iDEN-based
wireless services primarily to mid-sized to large businesses and government agencies that value our
industry and technical expertise and extensive product and service portfolio, as well as our ability to
develop custom communications capabilities that meet the specific needs of these larger customers;
• retail outlets that focus on sales to the consumer market, including Radio Shack, Best Buy, Target,
Wal-Mart and Sprint Nextel retail stores;
• indirect sales agents that primarily consist of local and national non-affiliated dealers and independent
contractors that market and sell services to small businesses and the consumer market, and are generally
paid through commissions; and
• customer-convenient channels, including web sales and telesales.
We market our post-paid services under the Sprint and Nextel brands. We offer these services on a contract basis
typically for one or two year periods, with services billed on a monthly basis according to the applicable pricing
plan. We market our prepaid services under the Boost Mobile brand, as a means to directly target the youth and
prepaid wireless service markets.
Although we market our services using traditional print and television advertising, we also provide exposure to
our brand names and wireless services through various sponsorships. We are the title sponsor of the NASCAR
NEXTEL Cup SeriesTM, the National Association for Stock Car Auto Racing, or NASCAR®, premier national
championship series. We are NASCAR’s official telecommunications sponsor, which entitles us to a variety of
branding, advertising, merchandising and technology-related opportunities, many of which are exclusive with
NASCAR, its drivers and teams, and the racetrack facilities. We also are the official telecommunications service
provider of the National Football League, or NFL, and the provider of exclusive and original NFL-related content
as part of our Sprint-branded wireless service. We also have been the exclusive sponsor of a number of NFL
events, including the Super Bowl XL half-time show. The goal of these initiatives, together with our other
marketing initiatives, which include affiliations with most major sports leagues, is to increase brand awareness in
our targeted customer base and expand the use of our customer-convenient distribution channels: web sales,
telesales and retail stores.
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