Summary
The combination of these two companies from a longevity of operations is a good move. The costs and recognized value is still depressed.
Analysis
For Sprint, separation of the land-line business was okay because the holdings were for local companies. Currently, Sprint Mobile is exposed to network back-haul obstacles where it must purchase from it's competitors. this was also true when the holdings included local land-lines. Nextel brings to Sprint the ability to build and manage loops to towers and aggregation points.
Nextel gains access to potentially growing or more stable revenue than from it's land-line and stagnant priced network. It is stuck with the no-leverage but thankful purchases from the cable industry.
I have tried to get many new builds justified but frankly, the pay-back is still 2 years, not 10 months which is required. The tremendous amount of builds creating new pops with quicker payback through Sprint, plus revenue fill from a new major source is critical for Nextel.
Finally, the synergies that Sprint and Nextel have brought to Cable TV is less likely to be attacked than if it Sprint went elsewhere. Currently Verizon and AT&T have no value in offering anything for Sprint and continues to have no use for Nextel.
