Sextel Stepping Away From LoCo

4 Comments

Sprint-Nextel is moving ahead with its plans to spin-off the local wireline business (LoCo), according to a “registration statement Form 10-12B” as per UBS Research. The documents show that the local business had revenues of $4.65 billion in the first three quarter of 2005. That works out to about $6 billion in sales. LoCo will have 7.4 million lines, making it roughly the fifth largest local phone company in the country.

LoCo will have roughly 20,000 employees at the time of the spin-off. The good news is that LoCo employees will get to keep their pension plans. The Local Biz will also be an MVNO arrangement for Sprint Nextel and a new brand name will be announced in 1Q06 with the spin on track to occur in the second quarter. The LoCo will have a new board of directors including William A. Owens, former CEO of Nortel Networks Corp and Daniel R. Hesse, CEO of Sprint Nextel Local Telecommunications Division.

4 Comments

Jesse Kopelman

Hesse is a wireless guy. How’d he get banished to wireline?

emaw_kc

I suspect that LoCo will try to come up with some kind of MVNO play, possibly with a sweetheart deal from its former parent company. Just a guess.

Japan's Cellphone Edge

So, how LoCo will survive in the situation when fixed mobile substitution accelerates? What’s their bet? Broadband? FMC? IMHO, just reselling Sprint Nextel service won’t provide enough money to sustain in business.

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