Sprint - Nextel 2005 Annual Report Download - page 52

wireless networks built and operated at its expense. During 2005 and the first quarter 2006, we acquired five PCS
Affiliates and we expect to acquire Nextel Partners in the second quarter 2006.
We also are one of the nation’s largest providers of long distance services and are one of the largest carriers of
Internet traffic. In addition, we provide regulated local exchange telephone services to approximately 7.4 million
access lines in our local service territories in 18 states.
We believe the communications industry has been and will continue to be highly competitive on the basis of
price, the types of services offered and quality of service. Although competitive pricing is often an important
factor in potential customers’ purchase decisions, we believe that our targeted customer base of individuals and
businesses and government agencies will also base their purchase decisions on quality of service and the
availability of differentiated features and services.
We operate in an industry that has been and continues to be subject to consolidation and dynamic change. To
maintain our operating margins in an environment of intense competition that could put pressure on customer
pricing, we continually seek ways to create or improve capital and operating efficiencies in our business.
Consequently, we routinely reassess our business strategies and their implications on our operations and these
assessments may continue to impact the future valuation of our long-lived assets. As part of our overall business
strategy, we regularly evaluate opportunities to expand and complement our business and may at any time be
discussing or negotiating a transaction that, if consummated, could have a material effect on our business,
financial condition, liquidity and/or results of operations.
The FCC regulates the licensing, operation, acquisition and sale of the licensed spectrum that is essential to our
business. The FCC and state PUCs also regulate the provision of telecommunications services. Future changes in
regulations or legislation related to spectrum licensing or other matters related to our business could impose
significant additional costs on us either in the form of direct out-of-pocket costs or additional compliance
obligations.
Statements contained in this annual report relating to business strategies, operating plans, planned expenditures,
expected capital requirements and other forward-looking statements regarding our business generally do not take
into account the contemplated spin-off of Embarq.
Management Overview
Wireless
Through our Wireless segment, we, together with the remaining PCS Affiliates and Nextel Partners, offer digital
wireless service in all 50 states, Puerto Rico and the U.S. Virgin Islands, and provide wireless coverage in over
300 metropolitan markets, including the 125 largest U.S. metropolitan areas, to more than 277 million people.
Including subscribers who purchase services from the PCS Affiliates, Nextel Partners and our MVNOs, we
served more than 49.6 million subscribers at the end of 2005. We offer a wide array of wireless mobile telephone
and wireless data transmission services on networks that utilize CDMA and iDEN technology. Our strategy is to
utilize state-of-the-art technology to provide differentiated wireless services and applications in order to acquire
and retain high-quality wireless subscribers. To enable us to offer innovative applications and services, we are
deploying high-speed EV-DO technology across our CDMA network. The services supported by this technology,
marketed as PowerVision, give consumer and business subscribers with EV-DO-enabled devices access to
numerous sophisticated data messaging, imaging, entertainment and location-based applications. On our iDEN
network, we continue to develop features and services that are designed to meet the needs of business and
government customers with a particular focus on services that build upon our unique walkie-talkie features. We
also seek to realize operating efficiencies in our business, largely from merger-related synergies, and optimize
the performance of our network while minimizing costs.
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