United by Lack of iPhone, Sprint and T-Mobile USA Reportedly Talk Merger
The on-again, off-again talks between T-Mobile and Sprint appear to be back on again, or at least they have been recently.
According to Bloomberg BusinessWeek, the latest chatter has revolved around a deal in which T-Mobile parent Deutsche Telekom would sell its U.S. carrier to Sprint in exchange for a significant stake in the combined entity.
Deutsche Telekom has made no secret that it is looking to improve its U.S. position and also has acknowledged that, at least long-term, it needs new spectrum to be able to offer a next-generation network. The two firms are also united by the fact that both trail market leaders AT&T and Verizon in terms of both customer size and iPhone-having-ness.
On the downside, T-Mobile and Sprint have current networks that are incompatible. There’s also the usual issue of how to value each side. According to the report, Deutsche Telekom is looking for a roughly 50 percent stake in the merged entity.
“In general, all options are open in the U.S.–the sale of the whole business or of parts,” Deutsche Telekom Chief Financial Officer Timotheus Hoettges said in an emailed statement to Bloomberg Businessweek. Sprint declined to comment for the report.
Mobilized doesn’t have a lot to add, except to quip that T-Mobile has said that it is planning to introduce a new Sidekick.
Both companies are keeping their options open, though. According to the report, T-Mobile is also still interested in acquiring spectrum from Clearwire. Of course, that only fuels the interest for Sprint and T-Mobile to keep talking, since Clearwire is part-owned by Sprint and is a partner in the Wi-Max network that Sprint uses to offer its own 4G service.
Sprint and T-Mobile have also reportedly had talks in the past about T-Mobile investing in Clearwire.