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Sprint talking to T-Mobile USA

by on09 March 2011

Possible acquisition in the works?
A number of sources say that Sprint and T-Mobile USA are holding talks about a possible acquisition. Our sources seem to agree that Deutsche Telekom (who owns the number four carrier in the U.S.) is discussing a number of options that could see a variety of things happen to T-Mobile. Sources suggest that Deutsche Telekom and Sprint have been talking on and off for a long time, but nothing has ever come of these talks so far.

It seems that the options Deutsche Telekom is discussing with Sprint could see the company sell all or part of their USA business. Whispers suggest that one of the major stumbling blocks is apparently the actual real value of T-Mobile USA. If Sprint and Deutsche Telekom actually do come to some sort of deal, it is expected that Deutsche Telekom would take a stake in Sprint as part of the transaction.

The most interesting aspect about the deal with Sprint is that T-Mobile USA, as with AT&T, uses GSM technology and is currently committed to LTE for its long-term 4G strategy. Sprint, on the other hand, uses CDMA and WiMAX for its 4G strategy. Sprint also acquired Nextel, which also used technology that was proprietary technology developed by Motorola.

Sprint recently announced that they would be ending support for the iDen technology by moving users off that platform to free up spectrum. A merger of Sprint and T-Mobile USA would give Sprint access to more spectrum that could be used in a number of ways. Analysts that we spoke with suggest that the lack of compatibility between the current platforms is an issue, but it could be solved longer term if Sprint were to adopt LTE going forward which would put both on the same platform.
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