Sprint had little choice but commit to Nextel

The FCC on Thursday came to Sprint’s rescue, giving it until March 31, 2010 to vacate the spectrum. The compromise, however, does set a hard deadline: Sprint has to leave the lower 800 MHz in 18 months whether public safety agencies are ready to move or not. Though there is still some uncertainty in the rebanding timeline, the extension could ultimately be what Sprint needs to sell Nextel, if not now then when capital markets free up in the future, according to equity research firm Stifel Nicolaus.

“Bottom line, this resolution, which we expected, carries some risk of service disruption for a few major markets but overall is good news for Sprint,” a Stifel research note stated. “It also provides an incremental increase in certainty on the spectrum rebanding, which we believe is necessary to make them an attractive potential takeover target.”

In other Sprint news, the carrier also recently announced it is adopting pro-rated early termination fees (ETF), as most of its competitors have already done. Sprint’s initial ETF will remain $200, but after 6 months will drop in $10 increments for each month the customer continues to honor the contract. After 15 months, Sprint said, its customers will have the lowest ETF in the industry ($100) and that the ETF would be only $50 when a 2-year contract finally expires.