Deutsche Telekom may bid for Sprint-Nextel

[mkrishnan]

http://online.wsj.com/article/SB120994107407665981.html?mod=googlenews_wsj

The potential bid is being considered as the former German monopoly scouts for acquisitions in countries outside the German market, where it has seen its revenue shrink in recent years amid rising competition and falling prices. Last year, it booked just over 50% of its revenue outside Germany for the first time.

T-Mobile is a distant No. 4 in the U.S. wireless market, with 28.7 million customers at the end of December. It invested heavily last year to acquire new wireless spectrum and is eager to expand. By acquiring Sprint Nextel, it could roughly triple its client base in the U.S. and surpass leaders AT&T Inc. and Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC.

Obviously, the fact that Sprint has a fairly well-deployed CDMA network with 3G data services, but T-Mobile USA just bought an atypical frequency presumably to use with HSDPA is one of the major headaches that would be involved.

It seems to me like Sprint has gotten quite stagnant, and I have to honestly say that I have never missed them since I left in 2003. But if T-Mobile were to adopt CDMA as part of the merger, I would probably switch to AT&T... Also, while T-Mobile's customer base has gotten quite small, the long term transition of 30M more customers out of GSM will make the US an even weaker GSM market than it is now, which is a problem for us in terms of getting the best European technology (albeit it gives us premium access to the best Korean technology).

 

[yg17]

If anything happens, they would convert Sprint to GSM before converting T-Mobile to CDMA.

 

[mkrishnan]

If anything happens, they would convert Sprint to GSM before converting T-Mobile to CDMA.

I'd think, particularly since, AFAIK, DT is GSM in all other markets. But Sprint would be ... 2/3 of the combined company? Which would be a lot of users to convert. If it were to happen, either way, it would significantly affect the market of either GSM or CDMA in the US....