(Adds analyst quote, Sprint comment, recasts)
NEW YORK, Oct 30 (Reuters) - Sprint Nextel Corp (S.N) said on Thursday it would keep its customer-losing iDen network after efforts to sell it failed, and it outlined plans to rejuvenate the business it bought from Nextel Communications in 2005.
“After careful review of the iDen business, Sprint intends to retain and rejuvenate this important asset,” the company said in a statement.
Sprint, which has been struggling to stem customer losses, had announced this summer that it was looking at options including a sale of the iDen unit it had bought for $35 billion.
Stifel Nicolaus analyst Chris King said it made sense for Sprint to keep the asset if it could not get a sale price of at least $5 billion, a price he said the company would have no chance of getting in tight credit markets.
“I don’t believe you can turn around Sprint Nextel without at least stabilizing the iDen network. Reaffirming their commitment could in and of itself certainly improve trends,” said King, noting that some iDen business customers may have been worried about the prospect of a sale.
Chief Executive Dan Hesse told Reuters earlier this month that Sprint received significant interest in the network but he acknowledged that bidders requiring financing faced challenges in the worsening credit markets.
Now that it is keeping the network, Sprint said it would create early next year a nationwide unlimited calling plan with one monthly fee for its youth-focused Boost mobile service. Boost uses the iDen network, which supports walkie-talkie services as well as traditional cell phone calls.
Sprint had been testing a Boost-branded unlimited service on its CDMA network but stopped expanding that trial beyond a few markets earlier this year.
It also extended its technology supply agreement with Motorola Inc MOT.N, the developer of the proprietary iDen technology, and said it plans to introduce several new iDen phones, including a version of Research In Motion RIM.TO hugely popular BlackBerry Curve.
In a separate announcement on Thursday, Sprint also said the Federal Communications Commission had given it a waiver regarding its obligation to stop using certain airwaves where the iDen network risks interfering with public safety networks.
The FCC will allow Sprint to gradually vacate the airwaves in question based on the region-by-region progress made by public safety licensees in retuning their own systems. (Reporting by Sinead Carew; editing by Jeffrey Benkoe and Gunna Dickson)