Sprint - Nextel 2006 Annual Report Download - page 6

Our Business Segments
Wireless
We offer a wide array of wireless mobile telephone and wireless data transmission services on networks that
utilize CDMA and iDEN technologies.
Strategy
Our strategy for the Wireless segment 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 Power Vision, give our subscribers with EV-
DO-capable devices access to the Internet and numerous sophisticated high-speed data messaging, imaging,
entertainment and location-based applications. Currently, EV-DO technology covers nearly 209 million people
and serves customers in over 219 communities with populations of at least 100,000. We also have begun to
incorporate 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. This version of EV-DO, known as EV-
DO Rev. A, is designed to support a variety of IP and video and high performance walkie-talkie applications
for our CDMA network.
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:
kare adding cell sites to improve network performance and expand the coverage and capacity of our
networks;
kare increasing media expenditures to improve brand awareness;
khave enhanced incentives to improve third-party sales distribution and accelerate growth, and are
implementing customer retention programs that focus on our high-value customers;
kare 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;
kare improving our handset portfolio across both our CDMA and iDEN network platforms;
kare helping to relieve capacity constraints on the iDEN network and to offer subscribers of our iDEN
services all of the benefits of our applications on our CDMA network and our walkie-talkie
applications, by offering a new line of combined CDMA-iDEN devices, marketed as PowerSourceTM,
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
kexpect to substantially complete the integration of a number of other systems, including human
resources, general ledger, sales commissions and billing. We believe that integration of these systems
onto single platforms will create efficiencies in the way we do business, and, in the case of our billing
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