Sprint - Nextel 2013 Annual Report Download - page 4

Table of Contents
our targeted subscriber groups through focused communications solutions that incorporate the capabilities of our wireless and wireline services. We are the
third largest wireless communications company in the U.S. based on wireless revenue, one of the largest providers of wireline long distance services, and one of
the largest Internet carriers in the nation. Our services are provided through our ownership of extensive wireless networks, an all
- digital global long distance
network and a Tier 1 Internet backbone.
We offer wireless and wireline voice and data transmission services to subscribers in all 50 states, Puerto Rico, and the U.S. Virgin Islands under the
Sprint corporate brand, which includes our retail brands of Sprint®
, Boost Mobile® , Virgin Mobile
®
, and Assurance Wireless® on networks that utilize third
generation (3G) code division multiple access (CDMA) or Internet protocol (IP) technologies. We also offer fourth generation (4G) services utilizing Long Term
Evolution (LTE) as well as Worldwide Interoperability for Microwave Access (WiMAX) technologies (which we expect to shut
- down by the end of 2015). We
utilize these networks to offer our wireless and wireline subscribers differentiated products and services whether through the use of a single network or a
combination of these networks.
Recent Acquisitions
On May 17, 2013, Sprint Communications closed its transaction with United States Cellular Corporation (U.S. Cellular) to acquire personal
communications services (PCS) spectrum and subscribers in parts of Illinois, Indiana, Michigan, Missouri and Ohio, including the Chicago and St. Louis
markets, for $480 million in cash. Sprint Communications agreed, in connection with the acquisition, to reimburse U.S. Cellular for certain network shut
- down
costs in these markets, the majority of which is expected to be paid by the end of 2016. These costs are expected to be approximately $160 million on a net
present value basis, but in no event will Sprint Communications' reimbursement obligation exceed $200 million on an undiscounted basis. The additional
spectrum will be used to supplement Sprint's coverage in these areas.
On July 9, 2013, Sprint Communications completed the acquisition of the remaining equity interests in Clearwire Corporation and its consolidated
subsidiary Clearwire Communications LLC (together "Clearwire") that it did not previously own (Clearwire Acquisition) in an all cash transaction for
approximately $3.5 billion , net of cash acquired of $198 million , which provides us with control of 2.5 gigahertz (GHz) spectrum and tower resources for use in
conjunction with our network modernization plan. The consideration paid was preliminarily allocated to assets acquired and liabilities assumed based on their
estimated fair values at the time of the Clearwire Acquisition. The allocation of consideration paid was based on management's judgment after evaluating several
factors, including a preliminary valuation assessment.
See "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and also refer to the Notes to the
Consolidated Financial Statements for more information on the significant transactions noted above. Also see "Item 1A. Risk Factors" for risks related to the
SoftBank Merger and Clearwire Acquisition.
Our Business Segments
We operate two reportable segments: Wireless and Wireline. For additional information regarding our segments, see "Part II, Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations" and also refer to the Notes to the Consolidated Financial Statements.
Wireless
We offer wireless services on a postpaid and prepaid payment basis to retail subscribers and also on a wholesale and affiliate basis, which includes
the sale of wireless services that utilize the Sprint network but are sold under the wholesaler's brand. We continue to support the open development of
applications, content, and devices on the Sprint platform through products and services such as Sprint ID™, which provides an easy way for users to discover
content from leading brands and special interests as well as manage those experiences on certain Android devices, and Sprint Zone, which allows subscribers to
not only manage their account and self
- service functions via their device but facilitates discovery of new content and personalization through recommendations
for applications and entertainment content. We also support Sprint Guardian™, a collection of mobile safety and device security bundles that provide families
relevant tools to help stay safe and secure, and Pinsight Media+™, which gives advertisers the power to reach consumers on their mobile device by providing
more relevant advertising based on information consumers choose to share about their location and mobile Web browsing history. In addition, we enable a
variety of business and consumer third
- party relationships through our portfolio of machine - to - machine solutions,
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