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T-Mobile parent firm to buy out Sprint?

updated 09:20 am EST, Fri March 7, 2008

T-Mobile may Buy Sprint

T-Mobile's head company Deutsche Telekom may consider buying Sprint and shake up the industry as a result, according to an investment note by Merrill Lynch. The financial group claims that economic circumstances may pressure the German phone company into making a move for the American company. Chief among these is a recently introduced unlimited Sprint plan that offers both voice and data. By pushing the prices downward, Sprint may trigger a price war that T-Mobile USA cannot sustain, pushing Deutsche Telekom to acquire Sprint and prevent the carrier from dropping prices beyond where T-Mobile can compete.

Sprint's worsening losses and a weak US dollar may also make for a likely buyout, as it would make any transaction relatively affordable, Merill Lynch analysts say.

Any acquisition of the kind would create a tremendous shift in the US cellular market, which is split primarily between five major carriers that would be reduced to four -- Alltel, AT&T, T-Mobile, and Verizon -- in the event of a merger. The change would also create a difficult transition period for customers of one service or the other, as T-Mobile would have to consider either discontinuing Sprint's CDMA phone network or its own GSM-based service to supply a unified network.

It would also create problems with the iDEN push-to-talk network Sprint inherited from Nextel, which itself is not compatible with either CDMA or GSM but is often used by specific US businesses, such as the construction industry.

None of the involved companies have comented on the report.



By Electronista Staff
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Comments

  1. bjojade

    Fresh-Faced Recruit

    Joined: Jun 2007

    0

    Anti-competitive?

    How would this pass the anti-monopoly laws? They're buying out the company because they can't compete on price? It's obviously not a logical blend of companies as their technology offerings are wholly incompatible.

    This will never fly.

  1. r00b69

    Fresh-Faced Recruit

    Joined: Jan 2006

    0

    but what about ....

    Nascar? How does the Deutsche Telekom Cup sound? Does this mean they'll let Mercedes and BMW race?

    ;-)

  1. climacs

    Forum Regular

    Joined: Sep 2001

    0

    could happen

    but T-Mobile is not gonna switch to CDMA considering the rest of their worldwide network is GSM. (thank goodness)

  1. michaelper22

    Fresh-Faced Recruit

    Joined: Sep 2007

    0

    Boost Mobile?

    Great, the weakening Sprint may be headed out on their own, or hrough an acqusition. So where will the various Sprint subsidaries, like Kajeet (a prepaid CDMA MVNO - mobile virtual network operator) and Boost Mobile (an iDEN prepaid carrier,based off the Nextel network), end up?

    T-mobile needs to step up to the plate with new service offerings, like HSDPA and better coverage. Their current selling point - ultra-cheap minutes and data plans (more affordable than from any other carrier, IMHO), don't make up for their big missing feature and lackluster coverage.

  1. resuna

    Fresh-Faced Recruit

    Joined: Jan 2005

    0

    The end of CDMA?

    Since I'm currently planning on switching from Sprint to T-mobile when my current plan runs out, this can't happen too soon (in fact it will certainly happen too late).

  1. igneousquill

    Fresh-Faced Recruit

    Joined: May 2008

    0

    How?

    Sprint has been crippled by trying to integrate Nextel's incompatible tech and come up with one unified network. As bad as that has been, how could T-Mobile even consider buying Sprint? As an extremely unhappy Sprint customer (is there any other kind) I have a feeling I wouldn't be any better off after the dust settles on a buy-out.

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