Sprint had already said the shutdown would commence sometime next year, but had not set a date. The Overland Park, Kan., phone company bought the Nextel network in 2005, and has lost money every quarter for the last four years as it’s struggled with the cost of running two incompatible wireless networks.
There were 5.4 million phones active on the Nextel network at the end of March. Many Nextel customers are businesses or government agencies who issue the phones to construction crews and other mobile workers. Sprint now faces the challenge of convincing these customers to move to the Sprint network rather than competing carriers. As part of the pitch, Sprint has added phones with a walkie-talkie-like “push-to-talk” feature.
Sprint is deactivating the Nextel network to make room on the airwaves for a new fourth-generation, or “4G” data network. The Nextel network is a second-generation, or 2G, technology with low data speeds that are unsuitable for smartphones.
Separately, Sprint said Tuesday that it’s been approved for a $1 billion line of credit to build out the new network. The credit line is provided by a syndicate of banks led by Deutsche Bank AG of Germany and is backed by the Swedish government’s export credit fund.
The Swedish government is involved because one of Sprint’s main vendors for the network is LM Ericsson AB of Sweden.