Analysts Play Guessing Game; Deutsche Telekom to Acquire Sprint?
According to an article this morning in the Kansas City Star, Deutsche Telekom is now an analyst-favorite to swoop in and save the day for sinking US carrier Sprint. It’s no mystery that Sprint would be an ideal target for a takeover; Sprint shares are dirt cheap, down almost 50% since the start of 2008. The dollar is dirt cheap as well of course and that is one of the many reasons analysts for Merrill Lynch are pointing their divining rods at T-Mobile owner, Deutsche Telekom. The Wall Street firm is speculating that continued woes may result in further price reductions at Sprint. Because T-Mobile is generally considered the best carrier option in terms of plan pricing amongst major US carriers, Merrill Lynch analysts believe further price slashing at Sprint would put unwanted pressure on T-Mobile to compete. As Sprint continues to lose subscribers and value, an acqusition may come sooner rather than later. No comment yet from Deutsche Telekom, currently the sixth largest telephone company with over 120 million customers globally.
[Thanks to everyone who sent this in]
I think this makes as much sense as the Sprint/Nextel merger.
Verizon is a much better candidate…
Hopefully Verizon does acquire Sprint… and then they can BOTH burst into flames.
Does this mean we will (hopefully) get customer reps who actually help you?
Who’s shorting Qualcomm shares today? There will be a firesale on CDMA equipment if this goes through.
http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=S:US&sid=aVbcSPCPOti4
I think this would be a great move on t-mobiles part. maybe it would give them the necessary means to give a rats ass about business users for once. get some more powerful phones or something, but we shall see
It would be an interesting idea, but I really hope there is no truth behind this. Sprint’s name is not good anymore and carries too much baggage with it. What would DT do with it but transfer the existing customers to T-Mobile and then shut down Sprint? Don’t forget that T-Mobile and Sprint use opposing technologies, and that would make any type of purchase all that more complicated. DT would spend money trying to maintain the Sprint/Nextel network, money that would be otherwise intended for expanding T-Mobile’s network and services (like 3G). “Hey, I’m sorry that we can’t deploy {insert new feature here} but we had to spend money to fix part of the Sprint network.” Doubtful. With the condition of Sprint after the Nextel merger, Sprint’s downward spiral is going to continue. Any competition that can arise from Sprint will be short-lived unless Sprint can make a miracle comeback in a short time.
http://www.cellformer.com/stories/2008/Mar/06/T-Mobile-to-acquire-Sprint-Probably-not-37.html
there is a good analysis of this here
Not going to happen for one very major reason that has nothing to do with CDMA vs. GSM. T-Mobile USA is by far the most profitable Deutsche Telecom subsidiary. It’s highly profitable because they keep costs of running and expanding their network as low as possible, while at the same time spending slightly higher than the US industry standard on customer service. T-Mobile scores well in customer surveys even though they’re just as cheap as Sprint on the network side. Deutsche Telecom then uses the high profit to balance out its T-Mobile subsidiaries in other countries which with the exception of T-Mobile UK that turns a slight profit, all lose loads of money on a regular basis. I highly doubt Deutsche Telecom would want to saddle their only cash cow in T-Mobile USA with the boat anchor that is Sprint.
You guys assume that DT would combine Sprint and T-Mobile. Remember, DT owns several carriers under the T-Mobile brand, but none of them are connected to each other. Now if they were to take Sprint and somehow offered to convert it to T-Mobile Business and then offered to move residential customers to T-Mobile USA with no penalties it could be a win all around.
Yikes! I hope if DT does this they would keep it seperate from T mo! What if they had three diff networks!
To me this dosn’t make sense. I can see voadaphone doing this more than DT
@msatlas, I agree in principle. CDMA/iDEN vs GSM would be the actual comparison, though. However, purely from a frequency spectrum and customer base point of view, it may be easier for T-Mobile to buy the fledgling company and slowly phase out the Sprint network. Of course, this is purely wireless…
With that said, it makes more sense for Verizon to take over Sprint. They’d get their global network backbone, in addition to their wireless business on like networks. Maybe then we can safely say ‘To Hell’ with WiMax.
Wow I’m so mixed after many of you brought up so many good points. I really love T-Mo since I switched from Sprint in September. Twice Sprint screwed by bill so bad I yelled and screamed and all they did was send the collection agencies on me rather than just admit their mistake and keep me as a loyal customer. I was with them for almost 6 years too. I like T-Mo so much they likely shouldn’t buy it, like when Diamlyer bought Chrysler. I’d rather watch Sprint implode. Hey Sprint Reps, I want my money back!
Well voadaphone based in germany OWNS over 45 percent of verizion wirless.
So voadaphon could use euros agaoisnt dollers an buy sprint. This would also upt tha amount of ownership vodaphone has vs. Verizon comunications.
A lot of great views brought up here. T-Mobile would be good for Sprint but Sprint would also be bad for T-Mobile. While Sprint has fast data their support is not reported to be very good or friendly, while T-Mobile had decent data speeds and very good and friendly support. Could be a big boost to market share for T-Mobile but has a lot of downsides. I hope it does not happen.
i think t-mobile is the best to ac
i think t-mo is the best company to buy sprint because they would bring great service to the sprint costumers who are suffering with sprint. i have been with att and my sis in law has sprint. and we all agree that t-mo has better quality, better prices, better service, and all around very good. i think sprint costumers would love to get all that instead of what they are getting now.
DT doesn’t have to combine “brands” (TMO and Sprint). They can simply purchase Sprint, Re-brand them, and then use the spectrum Sprint owns to build out both networks. They would have to do this without merging the company with TMO as I think the rest of the industry has learned from Sprint’s merger with Nextel that merging with diff technologies is not always the greatest idea. Let alone combining 3. iDen, GSM, CDMA.
So the major US provider with the fastest and cheapest unlimited data in my area and still no ties to treasonsous illegal wiretapping might get bought out? Damn.
hmm, makes me wonder what they would do with that CDMA network
especially since it has more customers than it’s own.
would it just ditch that highspeed EV-DO?
I agree with Ken, just as much sense as the sprint/nextel merger
lol
This would be good for T-Mobile but I see a problem with this. They would have to spend money changing the CDMA services to GPRS. This could cost a lot and take a long time to transfer all this. Other than this it would be something great.