In December, the Irvine, California-based mobile operator agreed to be acquired by Sprint Corp for $35bn. The deal is set to close in the second half of this year and will create the third largest mobile operator in the US.

Nextel is currently the fifth-ranked mobile operator in the US, and is principally known for its push-to-talk mobile phones. Sprint on the other hand is the third largest long-distance phone company in the US, and is also the number-three mobile operator.

For the fourth quarter Nextel posted net income down 26% at $468m, from $631m in the year-ago quarter. The decline was mainly due to a tax-related charge of $232m in the fourth quarter, nearly $200m more than the tax liability in the year-ago quarter. Fourth-quarter sales however were up 19% at $3.6bn.

For the year ending December 31, net income was an impressive $2.99bn, compared with $1.44bn in 2003. Revenue meanwhile rose 24% to $13.4bn, from $10.82bn.

2004 was a financially successful year for Nextel, said CFO Paul Saleh. During the year we decreased our net debt by 17% to $6.7bn.

The numbers speak for themselves, said Tim Donahue, the company’s president and CEO. Nextel finished 2004 with approximately 16.2 million subscribers, up 22% from the 13.3 million subscribers at the end of 2003. Average revenue per user was $69 for 2004, consistent with 2003. The monthly customer churn rate was 1.6% for the full year 2004, unchanged from 2003.

Nextel (along with Sprint) has the highest average revenue per user in the US mobile industry. This is because Nextel’s business customers, who pay higher monthly bills, are generally considered to be the most loyal among national wireless carriers.

When Sprint and Nextel merge, the combined company will have a total equity value of $70bn and more than 35 million mobile customers, with an additional 5 million subscribers through affiliates and partners. This will rank it in third place in the US, behind current market leader Cingular Wireless LLC with 47 million customers and second place Verizon Wireless with roughly 43.8 million customers. Deutsche Telekom AG’s T-Mobile USA Inc is a distant fourth with only 16.3 million customers.

Looking forward to 2005, the company said it expects to add another 2.9 million subscribers, excluding the Sprint tie-up.

Despite the impressive results, the company shares fell 0.6% to $29.00 on Nasdaq, as of 3.20pm GMT on Thursday.