Deutsche Telekom - Sprint Nextel Merger Rears Its Head AgainDeutsche Telekom - Sprint Nextel Merger Rears Its Head Again

A new report by the U.K. Telegraph says that Deutsche Telekom (T-Mobile USA parent company) is seriously preparing to make a bid for Sprint Nextel. The merged companies could become the nation's second-largest carrier. We've seen this story before. Could such a marriage really save either company?

Eric Ogren, Contributor

September 14, 2009

2 Min Read
information logo in a gray background | information

A new report by the U.K. Telegraph says that Deutsche Telekom (T-Mobile USA parent company) is seriously preparing to make a bid for Sprint Nextel. The merged companies could become the nation's second-largest carrier. We've seen this story before. Could such a marriage really save either company?In the wireless network world, rumors of a Sprint buy-out have been floating around for what feels like forever. Since the company's ill-fated merger with Nextel, it has been on weak financial footing, making it appear a ripe target. Now, sources indicate that perhaps Sprint's time has finally come.

The U.K. Telegraph, citing sources familiar with the company's plans, reports that Deutsche Telekom is building up a $10.6 billion pot with which to purchase Sprint Nextel. Deutsche Telekom, which is the parent company of T-Mobile USA and the T-Mobile brand worldwide, has been considering the idea for a year, but became serious about the idea about three months ago.

Deutsche Telekom recently decided to merge the operations of its U.K. and France-based units in hopes to regain some solid financial footing.

Would a DT-Sprint Nextel merger work? Things would get hairy pretty quick. First, Sprint uses CDMA for its main wireless network. It also runs the iDEN network to support its Nextel customers. We all know how poorly this marriage has worked out for Sprint Nextel. On top of these two networks, Sprint is rolling out WiMax for its 4G platform.

Taking a look at T-Mobile USA, there really couldn't be a less compatible candidate in the market. T-Mobile USA uses GSM-based technology for its main wireless network. It is in the middle of deploying its 3G systems with WCDMA/HSDPA. T-Mobile USA has chosen LTE as its 4G networking technology.

How on earth would Deutche Telekom handle the disparate network technologies? That alone sounds like the most daunting task ever taken on by a wireless company. What about billing systems, company philosophy, and branding, spectrum allocation? Oh, and let's not forget the FCC, SEC and FTC.

Granted, T-Mobile USA and Sprint both need a bit of a lift, but this seems like it could spell utter disaster for both companies and their millions of customers.

Read more about:

20092009

About the Author

Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.

You May Also Like


More Insights