Wednesday, March 09, 2011

Sprint, Deutsche Telekom AG reportedly in talks over T-Mobile

The Big 4 set of carriers in the U.S. may become the Big 3. Sprint, the No. 3 wireless carrier in the U.S., is reportedly speaking to T-Mobile USA's parent company Deutsche Telekom AG about possibly acquiring the No. 4 U.S. carrier.

In its recently released 4th quarter report, T-Mobile USA said it lost 318,000 contract-based subscribers. The other carriers all gained subscribers, even Sprint, for the first time since 2007.

Business Week, however, said the talks have been off and on, and that "a deal may not be reached." The big stumbling block appears to be a valuation for T-Mobile.

At the same time, the two carriers are united by a couple of things: they both trail AT&T and Verizon by significant amounts, and they both are iPhone-less.

In an email, Deutsche Telekom Chief Financial Officer Timotheus Hoettges told BW, “In general, all options are open in the U.S. -- the sale of the whole business or of parts.”

A Sprint - T-Mobile buyout or merger has been discussed for a long time. While the technologies (Sprint with CDMA, iDEN, and WiMax and T-Mobile with GSM and HSPA+) are different, Sprint is mulling a move to LTE. T-Mobile is claiming HSPA+ is 4G, which is isn't really, but plans a move to LTE in the long-term.

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