Deutsche Telekom looking to buy Sprint Nextel; if true, they’ll become the 2nd largest USA operator
By Stefan Constantinescu on Monday, September 14th, 2009 at 1:02 AM PST In Sprint, T-Mobile
Deutsche Telekom (NYSE: DT), otherwise known as T-Mobile (NYSE: DT), is looking at buying Sprint (NYSE: S) Nextel according to sources that spoke to the Telegraph. A bid could come within the next few weeks. As of Q2 2009, Verizon (NYSE: VZ) had 87.7 million customers, AT&T 79.6 million, Sprint Nextel 48.8 million and T-Mobile 33.5 million customers. If T-Mobile and Sprint Nextel merged, together they would have 82.3 million customers and therefore become America’s second largest operator. Technologically speaking, there is a bit of a problem with the merger. Sprint has a CDMA network, while T-Mobile uses GSM. Sprint is also one of the few nutjobs around the world trying to get WiMAX off the ground, for reasons only Dan Hesse and God know. If T-Mobile does indeed decide Sprint Nextel, which today is worth $10.6 billion, they’re going to have to spend an insane amount of money just to switch Sprint’s infrastructure over to GSM. It’s tricky, it’s risky, but AT&T and Verizon need a swift kick in the pants.
not feasible. they’d have to buy every sprint customer a new phone. or at least run the cdma network for two years from the date the merger happened to not breach all the two year contracts they already have. Not to mention the fact that they likely long term equipment agreements that are cdma specific that would have to be broken.
Sprint proved that merging two companies with diff network techs was not a good thing and now we are talking about merging those with GSM? That would be a bigger disaster. I hope this is not true.
Oh, and what about competition? This move would reduce competition in our wireless market. A reduction in competition has never resulted in good things for the customer.
In the past, I’ve scoffed — that’s right, SCOFFED — at these T-Mobile buys Sprint rumors, primarily because of the differing technologies. I still believe is why it shouldn’t be done, unless DT is willing to run Sprint & TM-US as two independent subsidies, but without the scale economies, the deal looks suspect.
Unless…
I read recently how both AT&T and VZW are headed for LTE. If possible, then DT could do the same with TMO and S, WiMax be damned, and a merger’s possible within a few years. LTE, if VZW is to be believed, is 1-3 years away, practically tomorrow. By buying S now, when it’s weakest (cheapest?), DT may reap a nice bump in 5-7 years.
BTW, does anyone know whether LTE is backwards compatible with GSM and CDMA?
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