The ratings on Reston, Va.-based wireless carrier Sprint Nextel Corp. reflect a satisfactory business profile stemming from its position as the third-largest wireless carrier in the U.S. and an industry-leading wireless data penetration rate. They also reflect a strong spectrum position on the Sprint legacy code division multiple access (CDMA) network; wholesale wireless operations, which help broaden market reach; satisfactory EBITDA margins in excess of 30%; solid liquidity; and moderate leverage. Tempering factors include competitive wireless industry conditions; merger integration and network technology implementation challenges, which have led to customer losses; declining ARPU; and high churn due to a large percentage of subprime customers. Sprint Nextel has an intermediate financial risk profile. Ratings incorporate the expectation of flat revenue growth
