Earlier this week the joint venture between Orange UK and T-mobile UK was announced but it seems that Deutsche Telekom has its eyes set on even bigger goals according to Telegraph. The company is apparently planning to place a bid on Sprint Nextel in the coming weeks. We’ve been hearing rumors that Deutsche Telekom might be making an offer to buy out Sprint Nextel for months, but with Sprint’s current $10.6 billion market valuation now might be the best time to buy because it looks like Sprint’s stock is on the rise.
As of now the current rumors for the Deutsche Telekom’s Sprint buyout point to either T-mobile UK merging its US operation with Sprint or a strategy to turn around the US Business into a single entity. In either scenario the US and German Governments would likely prove to be major hurdles so this will be a long term goal for Deutsche Telekom if they decide to move forward.
One thing to keep in mind with these takeover rumors is that the barrier between CDMA and GSM technologies will fall as carriers decide to move towards LTE for their 4G networks. Unfortunately Sprint is currently invested in WiMax and offers the service in quite a few locations across the US. Unless Deutsche Telekom decided to leave Sprint Nextel to operate this could pose a serious problem for manufacturers backing Sprint’s WiMax roll out.
| Current Market Alignment | Post Merger Alignment | ||
|---|---|---|---|
| Operator | Customer Base (m) | Operator | Customer Base (m) |
| Verizon Wireless | 87.7 | Verizon Wireless | 87.7 |
| AT&T | 79.6 | AT&T | 79.6 |
| Sprint Nextel | 48.8 | Sprint Nextel / T-Mobile | 82.3 |
| T-Mobile | 33.5 | Unconsolidated Minorities and Unidentified Others | 8.1 |
| Unconsolidated Minorities and Unidentified Others | 8.1 | MetroPCS Communications | 6.3 |
| MetroPCS Communications | 6.3 | US Cellular | 6.2 |
| US Cellular | 6.2 | Leap Wireless | 4.6 |
| Leap Wireless | 4.6 | Centennial | 1.1 |
| Centennial | 1.1 | ||
Mobile World put together the the breakdown above showing how the current US cellular market is today and how it would change following a merger of T-mobile USA and Sprint Nextel. You can count on At&t throwing a few wrenches into Deutsche Telekom since the merger would bump them down to the number 3 carrier based on subscriber numbers.
[Via Telegraph]