Original URL: http://www.theregister.co.uk/2009/09/14/dt_mulls_sprint_merger/
T-Mobile daddy mulls US merger
After T-Orange, T-Sprint
Posted in Broadband, 14th September 2009 19:39 GMT
Watch Now : Virtual Machine Movement with Hyper-V
Deutsche Telekom - owner of international wireless carrier T-Mobile - is mulling a multi-billion-dollar bid for Sprint Nextel, the third largest carrier in the US.
According to sources speaking with The Daily Telegraph [1], the German telecom giant has pulled in Deutsche Bank to explore a possible deal for Sprint, a company with a market value of $10.6bn.
After Deutsche Telekom reported a $1.46bn first quarter loss, chief exec Rene Obermann blamed the sinking fortunes of T-Mobile UK and T-Mobile US, vowing to turn the pair around. Last week, following a $751m Q2 profit, Obermann and co. announced the merger of T-Mobile UK and France Telecom's Orange UK, a move that creates Britain's largest carrier. And now, it would seem, DT is working to shore up its US efforts.
T-Mobile US is the country's fourth largest carrier behind Verizon and AT&T. A Sprint merger would give it a reach on par with AT&T, the sole US carrier for the Apple iPhone. Obermann and crew are already spending $1bn a year to improve the outfit's network, and who knows how much more would be needed to combine it with Sprint's network. T-Mobile uses GSM, Sprint uses CDMA, and Nextel - consumed by Sprint in 2005 - is built with iDEN.
The Telegraph says that T-Mobile has been exploring a Sprint merger for more than year, but that "serious preparations" for the deal began three months back. Press reports of a possible deal first surfaced in May 2008. ®