T-Mobile takeover? Nextel to be spun off?
Last modified on Monday, 10 March 2008 08:22
It seems that Sprint is the subject of many rumors as of late. Depending on whom you listen to the rumors have T-Mobile (Deutsche Telekom) buying Sprint, or perhaps Sprint will be spinning Nextel off prior to a merger or to generate cash to help its sinking balance sheet.
The merger in whatever form of Sprint and T-Mobile seems to be a bit weird if only due to the fact that Sprint uses CDMA technology and T-Mobile uses the more widely used GSM technology. This alone would make a merger difficult to achieve due to the fact that they would need to get everyone on the same technology platform in order to realize cost savings; and doing so could be a very expensive proposition.
Still, a variety of industry analysts seem to believe that in order to avoid a devastating cellular price war in the U.S., T-Mobile must grow both its network and subscriber base. Some have suggested that Verizon would be a more likely partner for a merger with Sprint because both companies use the same CDMA technology. Verizon really does not need to buy Sprint, because it has already been doing a good job at getting Sprint customers to switch to Verizon.
Some analysts have suggested that it is more likely that Sprint might spin Nextel off in an effort to help its sagging balance sheet. Many have suggested that the Sprint/Nextel merger has never really paid off in the way that Sprint expected it to. In addition, the company was never able to achieve the level of integration between the two networks that had been hoped for.
It has been said that Sprint expected more Nextel customers to switch over to the Sprint network than actually have. The Nextel equipment and brand continue to be popular among corporate customers, as well as long-time Nextel users who have not switched to the Sprint network or equipment.