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Nextel Communications, Inc. was an American wireless service operator that merged with and ceased to exist as a subsidiary of Sprint Corporation, which would later be bought by T-Mobile US and folded into that company. Nextel in Brazil, and formerly in Argentina, Chile, Peru, the Philippines, and Mexico,[4] is part of NII Holdings, a stand-alone, publicly traded company not owned by Sprint Corporation.
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| Nextel | |
| Formerly | FleetCall (1987–1993) |
| Company type | Public |
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| Founded | 1987 (as FleetCall) |
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| Defunct | June 12, 2013 |
| Fate | Merged with Sprint Corporation |
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| Headquarters | , |
Number of locations | Corporate Office, Regional Offices, Call Centers and Network Locations
Nextel Communications had a significant presence across various locations, including regional offices, call centers, and retail locations: Corporate Office: The corporate headquarters was located at 12502 Sunrise Valley Dr, Reston, VA. Regional Offices: Nextel had regional offices across the United States to manage operations and support local markets. Call Centers: The company operated multiple call centers to handle customer service and support. Network Operations: Nextel’s network operations were managed from various strategic locations to ensure robust and reliable service. International Locations Nextel Communications also had a notable international presence through its subsidiary, NII Holdings, which operated under the Nextel brand in several Latin American countries: Argentina: Nextel Argentina provided mobile communication services until its operations were sold. Brazil: Nextel Brazil operated 3G UMTS/HSDPA and 4G LTE networks and also maintained an iDEN network until its shutdown in 2018. Chile: Nextel Chile offered services until its operations were sold. Mexico: Nextel Mexico was part of NII Holdings until it was acquired by AT&T in 2016. Peru: Nextel Peru provided services until its operations were sold. Philippines: Nextel also had operations in the Philippines under NII Holdings. Number of Retail Locations Nextel’s retail presence grew significantly over the years: 1,300 (2005) 1,200 (2004) 1,100 (2003) 1,000 (2002) 900 (2001) 800 (2000) 700 (1999) 600 (1998) 500 (1997) 400 (1996) 300 (1995) These locations included stores and outlets where customers could purchase devices, plans, and receive customer support. |
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| Website | nextel |
| Footnotes / references [1] [2] | |
Nextel Communications traces its roots to the 1987 foundation of FleetCall by Morgan O'Brien, Brian McAuley, Chris Rogers, and Peter Reinheimer. FleetCall changed its name to Nextel Communications, Inc. in 1993. Nextel provided digital, wireless communications services, originally focusing on the fleet and dispatch customers, but later marketed to all potential wireless customers. Nextel's network operated in the 800-MHz Specialized Mobile Radio band and used iDEN technology developed by Motorola. Nextel's iDEN network offered a then unique push-to-talk "walkie-talkie" feature in addition to direct-dialed voice calls. Nextel was one of the first providers in the United States to offer a national digital cellular coverage footprint.
Prior to merging with Sprint Corporation in 2005, Nextel Communications, Inc. was a publicly traded company. Shares traded on the NASDAQ under the ticker symbol NXTL. Nextel was headquartered in Reston, Virginia, United States.[2]
At the time of its 2005 merger with Sprint Corp., Nextel had over twenty million subscribers in the United States and served 198 of the top 200 markets. Nextel Communications, Inc. offered postpaid services under the Nextel brand and prepaid services under the Boost Mobile brand.
In late 2010, Sprint Nextel announced plans to decommission the Nextel iDEN network; on May 30, 2012, Sprint Nextel announced that it would shut down the Nextel network as early as June 2013.[5] The Nextel network was officially shut down at 12:01am on June 30, 2013, and Sprint began the process of deploying LTE equipment on the 800 MHz spectrum formerly used by the iDEN network.
Before the acquisition by T-Mobile US, Sprint Corporation continued to offer pre-paid services under the Boost Mobile brand and also offered push-to-talk services as Sprint Direct Connect using CDMA equipment.
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In April of 1987, telecommunication lawyers Morgan E. O’Brien and Chris Rogers, along with investment bankers Brian McAuley and Peter Reinheimer, founded FleetCall.[6] The company was established with a vision to revolutionize the wireless communication industry by utilizing the 800 MHz Specialized Mobile Radio frequencies, which were originally designated by the Federal Communications Commission (FCC) for fleet dispatch services.
The name “FleetCall” was chosen to reflect the company’s initial focus on fleet dispatch communication. The founders’ innovative business model involved acquiring these fleet dispatch frequencies from existing operators at a significantly lower cost compared to the prices of equivalent bandwidth available through FCC auctions. This strategic move allowed FleetCall to offer a consumer and business wireless voice telephone service using Motorola’s Integrated Digital Enhanced Network (iDEN) technology. Despite initial skepticism about the practicality of iDEN technology, FleetCall’s founders were determined to make it work.
In 1993, FleetCall rebranded itself as Nextel Communications, marking a new chapter in its journey. The rebranding coincided with the company’s expansion and the introduction of new services. By 1995, Nextel had attracted significant investment from wireless industry pioneer Craig McCaw, further solidifying its position in the market.
Craig McCaw, a renowned figure in the telecommunications industry, played a pivotal role in Nextel’s growth. Following the sale of his company, McCaw Cellular, to AT&T for $11.5 billion in 1994, McCaw turned his attention to Nextel, which was struggling at the time. By April 1995, McCaw had gained effective control of Nextel, investing alongside his brothers to revitalize the company. His investment and strategic vision were instrumental in transforming Nextel into one of the leading wireless service providers in the United States.
Initially, FleetCall was hesitant to include the push-to-talk feature in their phones. However, the FCC mandated its inclusion as the initial frequencies were licensed for dispatch use. This feature, which allowed users to communicate instantly at the push of a button, later became a key marketing advantage for Nextel. The push-to-talk functionality set Nextel apart from its competitors and became synonymous with the brand.
Nextel’s innovative approach and strategic decisions, bolstered by McCaw’s leadership and investment, helped it grow into a major player in the wireless communication industry, paving the way for future advancements and setting a high standard for mobile communication services.
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Nextel Communications significantly impacted the cellular phone market through a series of groundbreaking innovations and technologies. These advancements not only set Nextel apart from its competitors but also paved the way for future developments in the telecommunications industry. Below are some of the key innovations and technologies introduced by Nextel:
Innovations and Technologies
- 2G Network Upgrade: Nextel completed its 2G network upgrade, ensuring faster and more reliable data services for its customers.
- Customer Lifecycle Management: Nextel invested heavily in analytics capabilities, allowing the company to effectively handle customer concerns, assess and review customer relationship values, and project and respond to customer loyalty. This focus resulted in industry-leading customer retention rates, average revenue per user, and customer lifetime value.
- DirectConnect: Nextel implemented the first nationwide push-to-talk system, similar to a walkie-talkie, known as DirectConnect. This feature allowed users to communicate instantly, setting Nextel apart from other cellular networks.
- GPS Integration: The company was a pioneer in integrating global positioning system (GPS) features into their phones, providing users with advanced location-based services.
- National Digital Cellular Coverage: Nextel was one of the first providers in the United States to offer a national digital cellular coverage footprint, enhancing connectivity and service reliability.
- Specialized Mobile Radio Band: Unlike other cellular networks, Nextel operated in the Specialized Mobile Radio (SMR) band, which provided a unique advantage in terms of network coverage and capacity.
- Unlimited Calling Plans: Nextel was the first company to successfully offer unlimited calling plans to a large customer base, revolutionizing the way consumers used mobile phones.
Key Leaders
- Craig McCaw: A wireless industry pioneer, McCaw became a significant investor in Nextel in 1995. His investment and strategic guidance helped stabilize and grow the company during a critical period.
- John W. Combs: John W. Combs served as the President of Nextel Communications. He brought extensive experience from his roles in various technology companies, including ShoreTel, Inc., where he served as Chairman and CEO. Combs’ leadership at Nextel was marked by strategic initiatives that helped the company expand its market presence and technological capabilities.
- Marci Carris: Marci Carris played a significant role in Nextel’s customer service and operations. She holds a BBA (1978) and an MBA (1983) from the University of Michigan’s Stephen M. Ross School of Business. Before joining Nextel, she held various positions at Ameritech and Peterson & Company, a litigation support consulting firm. At Nextel, she served as Vice President of Customer Finance Service and Assistant Treasurer and later became Senior Vice President of Customer Care at Sprint.
- Tim Bryan: Tim Bryan served on Nextel’s Board of Directors and played a key role in guiding the company’s strategic initiatives. His background in finance and telecommunications, including his leadership roles at ICO Global Communications and Eagle River Holdings, provided valuable insights that helped shape Nextel’s growth strategies.
- Tim Donahue: Tim Donahue served as the President and CEO of Nextel Communications. Under his leadership, Nextel transformed into a Fortune 500 company, providing service to 95% of Fortune 500 companies. Donahue’s drive for customer satisfaction, cultivated during his early career at Ben Franklin craft stores, was a cornerstone of his leadership. He believed that understanding and meeting customer needs was essential for business success. His daily drive was characterized by a relentless focus on improving customer experiences and fostering a culture of excellence within the company.
Impact on Company Culture
The leadership team at Nextel significantly influenced the company’s culture, fostering an environment of innovation, customer focus, and strategic growth:
- Customer Focus: Marci Carris’ emphasis on customer service and satisfaction helped create a culture that prioritized customer needs and loyalty. This focus on customer lifecycle management led to high retention rates and strong customer relationships. Nextel invested significantly in analytics capabilities, allowing the company to surpass competitors in handling customer concerns effectively. The company developed capabilities to assess and review customer relationship values objectively and to project and respond to customer loyalty. As a result, Nextel was known for industry-leading customer retention rates, average revenue per user, and customer lifetime value.
- Employee Empowerment: The leadership team fostered environment where employees were encouraged to contribute ideas and take initiative, Nextel created a culture of innovation and engagement. This empowerment led to higher employee satisfaction and productivity, which in turn contributed to the company’s overall success.
- Financial Performance: Nextel’s strategic initiatives also had a positive impact on its financial performance. The company’s focus on customer satisfaction and innovative services translated into higher revenues and profitability. For example, after the merger with Sprint, the combined entity saw significant improvements in customer satisfaction and a reduction in customer churn, which boosted financial performance.
- Innovation and Adaptability: The integration of advanced technologies like GPS and the development of the DirectConnect feature showcased Nextel’s commitment to innovation. Leaders encouraged a culture of adaptability and continuous improvement, which was crucial for staying competitive in the rapidly evolving telecommunications industry.
- Vision and Strategy: Leaders like Tim Donahue and Craig McCaw set a clear vision for the company, focusing on technological innovation and market expansion. This vision united employees and drove the company’s strategic initiatives.
Overall, these strategies helped Nextel grow rapidly and establish itself as a major player in the telecommunications industry. The company’s commitment to innovation, customer focus, and strategic leadership were key drivers of its success.
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Nextel had a long-standing partnership with Motorola, working closely on both equipment and standards. This collaboration led to the development of the Integrated Digital Enhanced Network (iDEN) protocol, which uses time-division multiple access (TDMA) technology. Here are some key aspects of iDEN and its impact:
- Global Adoption: Nextel was one of the few carriers to adopt iDEN globally. The technology gained traction through NII Holdings in Latin American countries and was also utilized by SouthernLINC Wireless in the Southeast United States and Telus Mobility in Canada under the Mike Mobile brand.
- Push-to-Talk (PTT): One of the standouts features of iDEN is its push-to-talk capability, known as DirectConnect. This feature allows users to communicate instantly, similar to a walkie-talkie, which was particularly popular among business and emergency service users.
- Trunked Radio and Cellular Integration: iDEN technology merges the functionalities of trunked radio systems and cellular telephony, allowing for efficient use of spectral space. This integration supports both voice and data communication, making it suitable for various applications.
Push-to-Talk
Nextel gained a significant marketing and technological advantage through its push-to-talk technology:
- DirectTalk: Nextel also offered a feature on some phones, marketed as DirectTalk. This technology used the 900 MHz ISM band and provided ten FHSS channels for off-network push-to-talk communications between phones not necessarily in range of wireless towers.
- Interoperability with QChat: In 2008, Nextel’s push-to-talk feature was made interoperable with QChat technology on the Sprint network. Sprint had initially launched its own push-to-talk service, ReadyLink, based on SIP. However, due to technological differences, ReadyLink users could not communicate with iDEN users. By 2009, Sprint began phasing out QChat to refocus on marketing iDEN devices.
- Legal Battle: Nextel and Verizon entered a legal battle in June 2003 over Verizon’s advertising for their push-to-talk feature. The companies reached a settlement in early 2004. Despite heavy initial advertising, Verizon’s service did not gain much traction, possibly due to poor reviews.
- Market Leadership: In 2003, Verizon Wireless and Sprint PCS launched their own push-to-talk features, followed by Cingular in 2005. However, none of these competitors gained significant traction. Nextel’s push-to-talk feature remained popular due to its reliability and ease of use.
WiDEN
In 2003, prior to its merger with Sprint, Nextel announced plans for its next generation 3G network using an extension to iDEN called WiDEN, developed by Motorola:
- Network Upgrade: Nextel upgraded their network to support the WiDEN packet data protocol, increasing data speeds up to 90 kbit/s. The Motorola i850, i860, i870, and i880 were the only phones to support WiDEN without modification.
- Service Removal: In October 2005, to free up network capacity for cellular calls due to rebranding, Sprint removed the ability to connect to the WiDEN service from all Nextel towers.
These technological advancements and strategic decisions helped Nextel maintain a competitive edge in the telecommunications industry, driving its growth and market presence.
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Integration, Challenges, and Legacy
Merger Announcement and Completion
- December 15, 2004: Sprint and Nextel Communications announced a merger agreement, creating Sprint Nextel Corporation. This merger aimed to combine Sprint’s wireless carrier services with Nextel’s push-to-talk technology, forming a leading communications company.
- August 12, 2005: The merger was officially completed, and Sprint Nextel Corporation was formed. The new company’s stock began trading on the New York Stock Exchange under the symbol “S” on August 15, 20052.
Integration and Migration
- Post-Merger Plans: Following the merger, Sprint Nextel focused on migrating Nextel customers to Sprint’s CDMA network. This migration was essential for consolidating network operations and leveraging Sprint’s infrastructure to provide better service coverage and reliability1.
Trademark Issues
Technological Advancements
- Push-to-Talk Integration: Sprint Nextel aimed to integrate Nextel’s push-to-talk feature with Sprint’s broader network capabilities. This integration was expected to provide a seamless communication experience for users, combining the best of both networks.
Financial and Market Impact
- Market Position: The merger strengthened the market position of both companies, allowing them to compete more effectively against other major telecommunications providers. The combined resources and customer base of Sprint and Nextel created a more robust entity capable of driving innovation and growth in the industry.
Subsequent Developments
- December 21, 2005: Sprint Nextel Corporation and Nextel Partners, Inc. reached an agreement for a $6.5 billion deal, whereby Sprint Nextel acquired the largest of Nextel’s affiliates to end Nextel Partners’ opposition to any changes by Sprint in relation to the Sprint-Nextel merger.
- 2006: Sprint spun off its local telecommunications business into a new company named Embarq, which later became part of Lumen Technologies under the CenturyLink brand.
- 2013: Following the shutdown of the Nextel network and concurrent with the acquisition by SoftBank, Sprint resumed using the name Sprint Corporation.
- April 1, 2020: Sprint was acquired by T-Mobile US, marking the end of Sprint as an independent company.
These events highlight the significant milestones and strategic decisions that shaped the trajectory of Sprint Nextel Corporation following the merger.
1: “AT&T Completes Acquisition of Nextel Mexico” (Press release). AT&T. Retrieved 2016-06-14. 3: “Sprint Corporation - Wikipedia”. Retrieved 2024-12-23. 2: “Press Release - SEC.gov”. Retrieved 2024-12-23.
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Due to many underlying maintenance and life cycle issues within the legacy public safety systems of the United States, co-channel interference was a common occurrence within 800 MHz band. To resolve the problems, Nextel and the Federal Communications Commission developed a plan, approved by the FCC in August 2004, to relocate Nextel systems elsewhere in the 800 MHz band in order to reduce the potential for interference.[7]
Before rebanding, public safety organizations, business and industry organizations, and SMRs/ESMRs both operated in the 851-861 MHz range. ESMRs had exclusive use of the 861-866 MHz range, and public safety organizations had exclusive use of the 866-869 MHz range.
During the rebanding process, the following occurred:
- All licensees with channels between 866 and 869 MHz (NPSPAC) were required to relocate to equivalent channels between 851 and 854.
- All licensees other than ESMRs with channels between 851 and 854 MHz were required to relocate to equivalent channels between 854 and 862.
- Nextel and other ESMR operators must relinquish all channels below 862 MHz. The FCC has required Nextel to vacate all its channels in the band from 854 to 854.5 nationwide as soon as possible to provide additional spectrum for public safety needs.
- Public safety organizations has exclusive access to all vacated Nextel channels for 3 years, after which they are open to all eligible users.
After rebanding, public safety organizations and critical infrastructure institutions obtained the exclusive use of 851-854 MHz. ESMR systems (primarily Nextel) were given exclusive use of 862-869 MHz range, and public safety, business/industrial users, and low-power SMRs shared the 854-862 MHz spectrum. 860-861 MHz is designated as an "Expansion Band", and 861-862 MHz is designated as a "Guard Band". No licensees other than ESMR are required to relocate to channels above 860 MHz.
The use of contiguous spectrum allows for simple filters to be installed to protect public safety radio systems from interference, which is currently impossible under the existing mixed allocations in the 800 MHz band.
Nextel (Sprint) paid for much of the cost of this reconfiguration, but in compensation for lost 800 MHz spectrum, the company received spectrum in the 2 GHz band at 1910–1915/1990–1995 MHz. This spectrum was located near the existing Sprint PCS allocations and can be used to expand the number of channels available for that service, without needing to bid for additional capacity in a spectrum auction.[8][9][10]
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Nextel was a major sponsor of the now defunct ChampCar team PacWest Racing, owned by Bruce McCaw, brother of Craig McCaw. This sponsorship helped Nextel gain visibility in the motorsports community and align its brand with high-performance and innovation.
On June 19, 2003, Nextel and NASCAR announced a sponsorship agreement to rename NASCAR’s top racing series to the Nextel Cup Series beginning in 2004. This sponsorship replaced R.J. Reynolds Tobacco Company’s Winston brand, which had been the title sponsor for 33 seasons. In 2008, the series was renamed the Sprint Cup Series due to Sprint Nextel’s plan to phase out the Nextel brand name, with the name lasting until the end of the 2016 season.
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- Innovative Technology:
- Nextel was a pioneer in digital mobile communications, introducing the first nationwide push-to-talk (PTT) service, which allowed users to communicate instantly, similar to a walkie-talkie.
- Strategic Partnerships:
- Strong Brand Identity:
- Through high-profile sponsorships and marketing campaigns, Nextel established a strong brand identity associated with reliability and innovation.
- Targeted Marketing:
Impact of Nextel's Sponsorships on Brand Loyalty
- Competitive Advantage:
- By associating with popular and prestigious events, Nextel differentiated itself from competitors, reinforcing its image as a leading and innovative telecommunications provider.
- Enhanced Customer Engagement:
- Sponsorships provided opportunities for direct customer engagement through events and promotions, helping build a stronger emotional connection with the brand.
- Improved Brand Loyalty:
- Studies have shown that effective sponsorships can enhance brand loyalty by creating a sense of self-congruity among customers. When customers identify with the events or causes a brand sponsors, they are more likely to develop loyalty towards the brand.
- Increased Brand Recognition:
- Sponsorships, such as the NASCAR Nextel Cup Series, significantly increased Nextel’s brand visibility, helping it become a household name among millions of NASCAR fans.
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