Deutsche Telekom in talks to sell T-Mobile USA to Sprint and keep a stake in the resulting carrier

Deutsche Telekom in talks to sell T-Mobile USA to Sprint and keep a stake in the resulting carrier
T-Mobile USA's owner Deutsche Telekom is reportedly exploring different options for America's 4th largest carrier, including selling it to Sprint, and keeping 50% stake, or buying wireless spectrum from Clearwire.

The talks are ongoing, and nothing is certain at this point, but Sprint Nextel's shares are up 7% today on the rumor. The major bickering is going on around T-Mobile USA's exact valuation. Big Magenta lost 56 000 customers last year, while all other carriers gained subscribers. The other issue is that Deutsche Telekom wants to have a 50% stake in the resulting carrier - Sprint and T-Mobile have a combined revenue of $54 billion for 2010.

The parent company of T-Mo is also exploring buying a huge chunk of wireless spectrum from Clearwire, which Sprint is using to provide its 4G WiMAX service, if the merger with Sprint doesn't pan out. Sprint, in its turn, is looking to buy 4G spectrum from LightSquared, which is a huge wholesale 4G LTE provider.

We will see how this all will end up, but if the acquisition of T-Mobile by Sprint goes through, the resulting carrier will have around 83 million subscribers, still less than those of AT&T or Verizon, plus their 3G and 4G technologies are rather different.

source: Bloomberg

FEATURED VIDEO

51 Comments

52. dIESEL88 unregistered

WELL THIS APPEARS TO BE A RATHER IRRELEVANT STORY NOW....

50. luis_lopez_351

Posts: 951; Member since: Nov 18, 2010

seriously man what with the thumbs down ;)

49. downphoenix

Posts: 3165; Member since: Jun 19, 2010

If this happens, it will certainly be smoother than the Nextel merger. T-mobile will probably be maintained independently until LTE becomes the norm for new phones, and they will probably still maintain their CDMA as Sprint and GSM as T-Mobile independently, not unlike how Alltel is still operated independently from Verizon and just being slowly phased out, they will do the same to T-mobile as GSM gets phased out slowly. The merger will be in name only really until then, the only thing that might come out of it besides that is integration of the billing systems, etc. to help lower operating costs.

48. ddsindpls

Posts: 17; Member since: Sep 16, 2007

Sprint does not need another network. CDMA, ISDN, GSM? Bad idea.

45. yungghost unregistered

Pretty interesting comments on the merger of sprint and t mobile but unfortunately i am against it I would rather a company like Google buying out t mobile USA. How would such a merger transform the wireless industry. Please comment i want to hear your thoughts on that as impossible as it seems.

47. snowgator

Posts: 3630; Member since: Jan 19, 2011

No advantage to Google on that deal. They are in position to become the world leader OS (numbers only), why take on a project like a carrier with all the hardware problems like a T-Mobile when that is not your strength? T-Mobile is easily in position to rebound- a good (not great) national network, name reconigtion, and a fairly loyal subscriber base, recent losses accepted. Someone should stand to profit real well from this, Deutsche Telekom wants to concentrate on the non-U.S. market that is wayyyyyy more profitable for them and just wants out. (What is the proper way to pronounce "Deutsche"? The way I keep saying it in my head is a female cleansing product. Probably not correct, huh?)

38. kg4icg

Posts: 83; Member since: May 18, 2008

I don't know why Bloomberg keeps popping up this rumor every year. Maybe to get stocks pumped up. SSDY.

35. tmorep unregistered

THIS WILL NOT HAPPENED SPRINT DES NOT HAVE ENOUGH CASH OR MONEY TO THIS THIS.

44. snowgator

Posts: 3630; Member since: Jan 19, 2011

According to Bloomberg (March 9th has an update on this story) it is not entirely a cash money purchase. Deutsche Telekom would keep a major holding in the ENTIRE new company. The same article states that this deal would be a 40 cents on the dollar loss on D.T.'s original investment. Last year alone, T-Mobile dropped 8% in value. Again, all according to Bloomberg.

34. oddmanout

Posts: 443; Member since: May 22, 2009

Funny how just last week I read an article on tmonews putting all the rumors to rest about sprint acquiring t-mobile. From what I've read, DT isn't looking to sell T-Mo at all and will remain an independent company.

33. Boti95

Posts: 162; Member since: Sep 05, 2010

This would be good thing. Now Sprints pre-paid carriers (if Sprint buys T-Mobile) would have GSM technology too! Think about it! Virgin Mobile woud have 4G and GSM phones which you could swap SIM cards and the same with Boost Mobile. T-Mobile's prepaid carrier would have more phone options and CDMA technology too!

32. luis_lopez_351

Posts: 951; Member since: Nov 18, 2010

whats up with all these thumbs down D; :) im responsible for it xD

29. MATOZ unregistered

I prefer to in the eventuality of a fusion between Sprint and Tmobile, the technology used MUST be GSM (HSPA, HSPA+ bla bla) instead of CDMA (for me to old tech). But, I have Tmobile account and don't want to switch to Sprint... CDMA technology. Who knows!! what happen next. Some interesting commercial names!: Next Mobile Next-T T-Sprint Mobile Sprint Sprint-T He, hehehehe...

27. cornerofthemoon

Posts: 620; Member since: Apr 20, 2010

The only way it would work is if Deutsche Telecom plays sugar daddy and they consolidate all of the networks into one brand. Perhaps Sprint could offer LTE, GSM, CDMA and iDen devices or they could come up with a completely new name.....sounds tres expensive and impractical though.

24. DOGIEFRESH

Posts: 316; Member since: Jul 15, 2009

Seems like Sprint didn't learn its lesson from Nextel fail, they're two completly different networks and the integration between those will take a lot, not to mention the money Sprint go to spend in the process, money that they don't have.....!!!

22. vvelez5

Posts: 623; Member since: Jan 29, 2011

I'm just gonna copy and paste a comment I put on another website that announced this a lil before this one. "I know its purely speculation and I know T-mobile isn't as bad as Nextel's quality but I would think Sprint has learned from that merge to focus on their own infrastructure then to buy into someone elses."

21. skymitch89

Posts: 1453; Member since: Nov 05, 2010

I could see T-Mobile buying spectrum from Clearwire, maybe for more HSPA+ roll out or even eventual LTE, but not Sprint buying T-mobile. For one, neither company can really afford to buy the other; and two, T-Mobile is GSM based and Sprint is CDMA based.

20. cornerofthemoon

Posts: 620; Member since: Apr 20, 2010

The Wall Street Journal thinks it won't happen for a long time, if it happens at all.

28. snowgator

Posts: 3630; Member since: Jan 19, 2011

W.S.J. is very reliable in this particular field. (mergers)

18. BaiGanyo

Posts: 308; Member since: Feb 07, 2011

DT doesn't want to invest any money in Tmo but wants to own a big stake of Sprint. Hmmm. They are uber controlling and are simply trying to get something for nothing by trying to make a power play for Sprint. I don't think it will work out for them.

15. bluechrism unregistered

US needs more competition, not less - plans from the big 4 are overpriced relative to European equivalents (just look up European carriers hompages to find out) and I don't know how it's going to work for the users of eaither network as the tech is so different between GSM and CDMA. Do you really want AT&T to be the only company to offer world phones (most of the world using GSM?) as well. I'd love Vodafone or someone to add to the GSM world in the US instead. T-Mobile and sprint suffered reputation issues, but both have cheaper plans than Verizon and At&T and good coverage in cities. T-Mobile was screwed when they bought their 3G bandwidth of the government and had to wait 4 years for the government to stop using it, but now seem to be cracking on and I have always had good customer service from them.

12. snowgator

Posts: 3630; Member since: Jan 19, 2011

GSM or CDMA? Would it actually benefit Sprint in any market it is not already in? Would it make the LTE easier? Would David Blane be invited back for the merger presentation? What color would magenta and yellow make? Come to think of it, what is magenta? Interesting news, but rumors this early don't mean much. Can't say it ain't a neat thought, but how do this two actually compliment each other?

13. snowgator

Posts: 3630; Member since: Jan 19, 2011

cornerofthemoon gets all credit for color scheme debates.....

11. calamazoo unregistered

so what's gonna happen with the t-mobile chick? she hot!

16. cornerofthemoon

Posts: 620; Member since: Apr 20, 2010

Perhaps Sprint will pair her together with James Franco.

10. cornerofthemoon

Posts: 620; Member since: Apr 20, 2010

Perhaps they'll brag about the acquisition of T-Mobile and all of it's network goodies and then spend the next few years trying to find a way to shut it down.

9. cornerofthemoon

Posts: 620; Member since: Apr 20, 2010

I'm curious what sort of color Magenta and Yellow would make if mixed together. There must be an app for that.

14. bbonline

Posts: 38; Member since: Feb 24, 2011

It would be orange. I like the name Orange for a carrier. There is a carrier in Europe with that name. Orange Wireless? Sounds good to me...

17. cornerofthemoon

Posts: 620; Member since: Apr 20, 2010

I actually blended it in Photoshop...It looks like Pink Grapefruit.

8. Box unregistered

This makes no sense. Why would they want to sell to a company that is losing money, who made a poor choice for their 4G LTE partner, killed the one thing they had going good for them (Nextel), and have a completely different technology type? If anyone should be buying T-Mobile (and hopefully they won't have to), it should be AT&T

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.
FCC OKs Cingular's purchase of AT&T Wireless