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Sprint Nextel Corp. (S - Analyst Report), one of the leading wireless providers in the U.S., has added a new device – Sonim XP STRIKE IS – to its Direct Connect product portfolio. The phone, manufactured by Sonim Technologies, comes with an inbuilt push-to-talk technology, especially designed to provide wireless communications in hazardous surroundings like gaseous or explosive atmospheres.

Sonim XP STRIKE IS incorporates durability and ruggedness with military specifications, backed by a three-year warranty. The phone can be availed through Sprint Stores, Business Sales or Telesales for $599.99 excluding taxes, with a new connection or an upgrade. The device has a two-year contract.

Beside Sonim XP STRIKE IS, Sprint also launched Sonim XP STRIKE last year, supported by Sprint’s domestic push-to-talk calls and international coverage to Latin American countries. In 2012, Sprint added more coverage to its Sprint Direct Connect push-to-talk service, which was thrice the push-to-talk coverage under the Nextel platform.
 
We believe that the company’s move on expanding its push-to-talk platform along with devices remains part of its Network Vision strategy to expand the core Sprint platform. The company is already increasing penetration of smartphones, iPhones in particular, and data plans to accelerate post-paid wireless subscriber growth. Further, incorporating push-to-talk devices to the Sprint Direct Connect portfolio are expected to generate additional synergies by increasing contractual services.

As part of the Network Vision strategy, the company launched LTE services initially in five major markets in Jul 2012. In 2013, the company expects to have LTE coverage for approximately 200 million customers, 170 additional markets, depending upon backhaul availability.

Sprint has already completed the 29,000 sites and leased 27,000 sites at the end of 2012. The Network Vision strategy is expected to result in the efficient use of capital, reduction of cell sites, the elimination of dual networks, backhaul efficiencies, reduced churn, lower roaming charges and energy cost savings. Hence, through this program the company is expected to generate $10 billion to $11 billion in savings over the next seven years (2011-2017).

Nevertheless, increased competition from top carriers like AT&T, Inc. (T - Analyst Report), and Verizon Communications Inc. (VZ - Analyst Report), heavy investments, lofty iPhone subsidies and continued wireline margin erosion keep us on the sidelines. In addition, we also remain cautious over the Sprint, SoftBank and Clearwire Corporation deal, which might face opposition from rival companies given its significance over spectrum transactions.

Sprint has a Zacks Rank #3 (Hold).

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