RSSWSJ: Deutsche Telekom mulls Sprint Nextel buyout
By Ed Oswald | Published May 5, 2008, 12:52 PM
Sources have told the Wall Street Journal that Deutsche Telekom is looking into either a merger or buyout of the third-largest US wireless provider.
With the addition of Sprint's customer base, T-Mobile would become the largest cellular provider in the US, serving nearly 83 million customers. The news appears to be a repackaging of earlier rumors that first surfaced in March.
At that time, investment bank Merrill Lynch first suggested that the company may be forced to merge with Sprint after the company rolled out new unlimited voice and data plans.
The company said the move could trigger a price war, which in turn could end up hurting T-Mobile financially. The US arm prides itself in providing its customers with plans with the most value, and these new plans from Sprint threaten that.
Expanding its international presence may make sense for the company. In 2007, for the first time it generated more revenue outside of its home country of Germany, and that is expected to expand.
With domestic fixed-line revenues quickly falling, the company has looked outward to its successful international wireless business. This has included expanding T-Mobile USA -- consistently a strong performer -- through acquisitions and deals.
Also, now may be the best time for an acquisition to happen, due to the weak dollar. Analysts note that if such a deal were to take place, it would actually be cheaper and more affordable to Deutsche Telekom than the VoiceStream merger which brought it into the US wireless market.
There are also many issues that could hold up or even block any tie-in. First and foremost, the two companies combined use three different wireless technologies. T-Mobile employs GSM, while Sprint Nextel uses CDMA and iDEN.
Combining this network could be a daunting task, which DT may not have the money to complete.
I'm not sure if DT can afford to buyout Sprint Nextel, but it would likely help them in the long run. It seems like both regular users and companies are jumping off the sinking Sprint Nextel ship, but like the article states, Sprint Nextel is still the third largest wireless phone provider in the United States.
I look forward to seeing whether or not DT is able to make this happen.
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"There are also many issues that could hold up or even block any tie-in. First and foremost, the two companies combined use three different wireless technologies. T-Mobile employs GSM, while Sprint Nextel uses CDMA and iDEN.
Combining this network could be a daunting task, which DT may not have the money to complete."
But if they were ablt to do this it would blow away AT&T and Verizon because you'd have both technologies in one phone. With T-Mobiles customer service and GSM, CDMA, iDEN phones T-Mobile would be a company to be reckoned with. I bet then AT&T and Verison would merge or one would buy the other out.
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But if they were ablt to do this it would blow away AT&T and Verizon because you'd have both technologies in one phone.
That would be unlikely to happen. Even now Sprint-Nextel doesn't have phones that work on both of their own networks. Their phones are either Sprint (CDMA) or Nextel (iDEN), not both.
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Sprint does have phones with both technolgies, they are called Hybrids. Also Sprint has a Blackberry that uses both CDMA and GSM, but it's resricted to Europe's GSM doesn't work in the states. Wouldn't take much to unresrict it. Besides DT doesn't have the funds to buyout Sprint, maybe Alltel...
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I was going to say the same thing. I know someone who has the iDEN/CDMA phone and Cnet reviewed the CDMA/GSM Blackberry. I really wish people would get their stories straight.
You don't think DT has the funds to buy Sprint? Aren't they one of the biggest carriers in Europe? I know their the 4th largest cell phone carrier in the US. I don't know much about the company. I just know if a CDMA and GSM company get together and make hybrid phones (for the US) it would really change cell phones and I think its something that needs to be done.
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Motorola ic902 is a CDMA/iDEN phone.
Its not that T-Mobile could afford Sprint/Nextel, its could T-Mobile afford the company and afford to integrate the two companies. There is more to buying a company than the cover price.
toodles.
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