Sprint - Nextel 2008 Annual Report Download - page 6

Competition
We believe that the market for wireless services has been and will continue to be characterized by
intense competition on the basis of price, the types of services and devices offered and quality of service. We
compete with a number of wireless carriers, including three other national wireless companies: AT&T, Verizon
Wireless and T-Mobile. Our primary competitors offer voice, high-speed data, entertainment and location-based
services and push-to-talk-type features that are designed to compete with our products and services. Other
competitors offer or have announced plans to introduce similar services. AT&T and Verizon also offer
competitive wireless services packaged with local and long distance voice, high-speed Internet services and
video. Our prepaid services compete with a number of carriers and resellers including Metro PCS
Communications, Inc., Leap Wireless International, Inc. and TracFone Wireless, which offer competitively-
priced calling plans that include unlimited local calling. Additionally, AT&T, T-Mobile and Verizon also offer
competitive prepaid services and wholesale service to resellers. Competition will increase to the extent that new
firms enter the market if additional radio spectrum is made available for commercial wireless services. We also
expect competition to increase as a result of other technologies and services that are developed and introduced in
the future, including potentially those using unlicensed spectrum and long term evolution (LTE). Wholesale
services and products also contribute to increased competition. In some instances, resellers that use our network
and offer like services compete against our offerings.
Most markets in which we operate have high rates of penetration for wireless services, thereby limiting
the growth of subscribers of wireless services. As the wireless market matures, it is becoming increasingly
important to retain existing subscribers in addition to attracting new subscribers. We and our competitors
continue to offer more service plans that combine voice and data offerings, plans that allow users to add
additional mobile devices to their plans at attractive rates, plans with a higher number of bundled minutes
included in the fixed monthly charge for the plan, plans that offer the ability to share minutes among a group of
related subscribers, or combinations of these features. Consumers respond to these plans by migrating to those
they deem most attractive. In addition, wireless carriers also try to appeal to subscribers by offering devices at
prices significantly lower than their acquisition cost, and we may offer higher cost devices at greater discounts
than our competitors, with the expectation that the loss incurred on the device will be offset by future service
revenue. As a result, we and our competitors recognize immediate losses that will not be recovered until future
periods when service is provided. Our ability to effectively compete in the wireless business is dependent upon
our ability to retain existing and attract new subscribers in an increasingly competitive marketplace. See Item 1A,
“Risk Factors—If we are not able attract and retain wireless subscribers, our financial performance will be
impaired.”
Wireline
We provide a broad suite of wireline voice and data communications services to other communications
companies and targeted business subscribers. In addition, we provide voice, data and IP communication services
to our Wireless segment and IP and other services to cable Multiple System Operators (MSOs) that resell our
local and long distance service and use our back office systems and network assets in support of their telephone
service provided over cable facilities primarily to residential end-user subscribers. We are one of the nation’s
largest providers of long distance services and operate all-digital long distance and Tier 1 IP networks.
Services and Products
Our services and products include domestic and international data communications using various
protocols such as multiprotocol label switching technologies (MPLS), IP, asynchronous transfer mode (ATM),
IP-based frame relay, managed network services, Voice over Internet Protocol (VoIP) and traditional voice
services. Our IP services can also be combined with our wireless services. Such services include our Wireless
Integration service which enables a wireless handset to operate as part of a subscriber’s wireline voice network
and our DataLink SM service, which uses our wireless networks to connect a subscriber location into their
primarily wireline wide-area IP/MPLS data network, making it easy for businesses to adapt their network to
changing business requirements.
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