Sprint Wins New Contract from VA - Analyst Blog

By Zacks Equity Research,

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Sprint Nextel Corp. ( S ) in collaboration with U.S. based IT and telecom infrastructure provider, A&T Systems has received a National Mobile Devices and Services contract from the U.S. Department of Veterans Affairs (VA). Sprint will now offer an array of wireless devices like smartphones, push-to-talk phones, feature phones, tablets, mobile hotspots and cards, M2M solutions, along with related wireless services.

Sprint's services under this new contract are expected to benefit VA in several ways. The contract would streamline operations by providing a single source of asset management for disadvantaged (SDB), woman-owned (WOSB), veteran-owned (VOSB), and service-disabled veteran small businesses.

Over the last 20 years, Sprint has been providing services to the U.S. Department of Veterans Affairs. The new contract continues to strengthen its alliance with the department and reflects its growing significance as a premium wireless career.

At present, Sprint's core platform business depends upon the success of its multi-billion dollar restructuring program known as Network Vision. Through this plan, the company is concentrating on the core Sprint platform, which includes CDMA, WiMAX and LTE technologies, and the eventual termination of the Nextel platform (iDEN business). 

The company began the deployment of CDMA voice on 800 MHz in the first quarter and is further expected to deploy LTE on 800 megahertz by the fourth quarter of this year. This network restructuring will enable the company to abort the Nextel platform by Jun 30, 2013, ultimately eliminating higher expenses of running two separate networks.

Further, the company also targets a strong recapturing rate (currently 46%) of Nextel customers with only 1.3 million customers remaining on the Nextel platform. This includes 1 million post-paid subscribers, the majority of whom are enterprise customers.

Apart from cost saving benefits, this program will enhance the company's operations through cell site reduction, backhaul efficiencies, better use of capital and reduced churn. The company expects the Network Vision deployment to be over by the end of 2013, two years ahead of the original schedule.

Going forward, to strengthen its position in the wireless business, the company is also competing with Dish Network Corp. ( DISH ) for the acquisition of broadband provider Clearwire Corp. ( CLWR ).

Sprint, which operates with other industry players such as AT&T, Inc. ( T ), has a Zacks Rank #3 (Hold).

CLEARWIRE CORP (CLWR): Free Stock Analysis Report

DISH NETWORK CP (DISH): Free Stock Analysis Report

SPRINT NEXTEL (S): Free Stock Analysis Report

AT&T INC (T): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: CLWR , DISH , S , T

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