Sprint - Nextel 2006 Annual Report Download - page 39

We also provide wireless services that are marketed and sold by several cable multiple systems operators, or
MSOs, in four markets. We also have entered into an agreement with several cable MSOs to jointly develop
converged services 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, to the participating cable MSO’s customers. During 2007, we expect to
develop new products and services and introduce service in additional markets.
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. We offer numerous sophisticated data
messaging, imaging, entertainment and location-based applications, marketed as Power Vision
SM
, across our
CDMA network that utilize high-speed evolution data optimized, or EV-DO, technology. Currently EV-DO
technology covers nearly 209 million people and serves customers in over 219 communities with populations
of at least 100,000. EV-DO data roaming is available in selected markets in Canada and Mexico. We also have
begun to incorporate EV-DO Rev. A, the next version of EV-DO technology, into our network, with plans for
coverage across the majority of the footprint of our CDMA network by the end of 2007. EV-DO Rev. A is
designed to support a variety of Internet Protocol, or IP, and video and high performance walkie-talkie
applications for our CDMA network.
On our iDEN network, we continue to support features and services that are designed to meet the needs of our
customers. Both the Nextel and Boost Mobile brands feature our industry-leading walkie-talkie services, which
give subscribers the ability to communicate instantly across the continental United States and to and from
Hawaii and, through agreements with other iDEN 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.
In recent periods, we have experienced declines in the number of new subscribers for our wireless services
and increases in our rate of subscriber churn. Customer satisfaction and churn have been adversely impacted
by capacity constraints on our iDEN network as a result of a number of factors, including the addition to the
network in recent years of many high-call-volume subscribers, limited effectiveness of the 6:1 voice coder
upgrade in the iDEN technology that was designed to increase network capacity, and the impact of the
reconfiguration process under the Report and Order. In certain of our most capacity constrained markets, we
have had to take actions to limit the acquisition of new subscribers of Nextel and Boost Mobile branded
services. Also, churn of subscribers of our CDMA services remains high relative to our competitors, in large
part due to credit-related deactivations. In 2006, we reorganized our sales and distribution and customer
management operations to improve customer satisfaction, adopted a regional sales, service, and distribution
structure to streamline operations, increase productivity and move decision-making closer to the customer, and
tightened our credit policies for new subscribers of both CDMA and iDEN services. In 2007, we:
• are adding cell sites to improve network performance and expand the coverage and capacity of our
networks;
• are increasing media expenditures to improve brand awareness;
• have enhanced incentives to improve third-party sales distribution and accelerate growth, and are
implementing customer retention programs that focus on our high-value customers;
• are adjusting our credit policies on a market-by-market basis in an effort to optimize the balance
between new subscribers who are of a prime and sub-prime quality;
• are improving our handset portfolio across both our CDMA and iDEN network platforms;
• are helping to relieve capacity constraints on the iDEN network and to offer subscribers of our iDEN
services all of the benefits of applications on our CDMA network and our walkie-talkie applications, by
offering a new line of combined CDMA-iDEN devices, marketed as PowerSource
TM
, that feature voice
and data applications over our CDMA network and walkie-talkie applications over our iDEN network
and we are expecting to introduce PowerSource devices that also feature our Power Vision data
applications over our CDMA network; and
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