T-Mobile USA to merge with Sprint Nextel?
According to a report from the Wall Street Journal, T-Mobile USA parent company Deutsche Telekom is mulling a bid to acquire Sprint Nextel. The acquisition would lead to a combined T-Mobile USA and Sprint Nextel, which would make for the largest wireless carrier in the U.S. Sprint Nextel boasts a market capitalization of $22 billion after its revenue fell to $40.1 billion in 2007 from $41 billion a year earlier--the operator also booked a net loss of $29.5 billion in the fourth quarter due to a non-cash goodwill impairment charge of $29.7 billion. At the end of its fourth quarter, Sprint was still the No. 3 carrier with 53.8 million subscribers. With 28.7 million customers at the end of December, T-Mobile USA lags a distant fourth, but a merger with Sprint would roughly triple its subscriber base and vault the company ahead of AT&T and Verizon Wireless.
Sprint uses CDMA technology and T-Mobile USA uses GSM, which has led some to predict LTE could be the technology that bridges the two carriers. That, of course, leaves Sprint's WiMAX build out plans in the lurch. Would regulators really allow the No. 3 and No. 4 U.S. carriers merge?
For more on the report:
- read the full article at WSJ (sub. req.)