Deutsche Telekom to buy Sprint?

 Deutsche Telekom is mooted to be in a take-over plot for the US’s Sprint Nextel which has a market cap of €7.26 billion. 

Now that the German giant has re-aligned itself in the UK market it is looking to solidify its performance and scale in other struggling territories.
 
The Telegraph reports that Deutsche Telekom could submit a bid for Sprint within the next few weeks. Its US subsidiary, T-Mobile is the bottom of the rung in the top four largest carriers in the US market, trialing Verizon, AT&T and Sprint.
 
Deutsche Telekom CEO chief executive René Obermann has vowed to produce a reversal of fortune for his vexing units T-Mobile UK and T-Mobile US which between them lost €1.1 billion in the first quarter alone. 

Last quarter Sprint said it lost 257,000 subscribers, reporting a loss of €264 million.
 
The Telegraph also speculates that Deutsche Bank has been appointed to lead the bid and suggests that the carrier may fund the deal by calling on its shareholders for funds. The German government owns 15% of Deutsche Telekom directly and holds another 17% via state-owned bank KfW Bankengruppe.
 
Sprint Nextel recently outsourced its entire network management to Ericsson, in a €3.43 billion, seven year deal. Should the takeover go ahead Ericsson will be well placed to benefit from a possible expansion of the contract to include the T-Mobile assets. Sprint currently runs three networks using different technologies, iDEN, CDMA and GSM networks.

 

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