Deutsche Telekom mulls Sprint takeover

Transatlantic alphabet soup


Deutsche Telekom is interested in buying Sprint Nextel, a move that would give it the top spot in the U.S. wireless market.

According to this morning's Wall Street Journal, the German-based telekom has entered "a preliminary stage" of discussions that may or may not lead to a bid for Sprint, America's Number Three cellco. DT already owns the Number Four player, T-Mobile USA, and a successful Sprint bid would see it leapfrog AT&T and Verizon into position Numero Uno.

In February, DT gobbled up the tiny US carrier SunCom Wireless, as it continues to expand business in foreign places. Last year, for the first time ever, over 50 per cent of the company's revenue came from outside Germany.

And the moment is ripe for a Sprint takeover, as the euro continues to gain against the dollar - and Sprint's fortunes continue to tumble. The company's revenues dipped from $41bn in 2006 to $40.1bn last year, with customers leaving in droves.

In January, Sprint axed 4,000 jobs and closed 125 retail stores. Then it delayed the debut of its already beleaguered WiMAX service. And late last month, cable giants Comcast, Cox, and Time Warner pulled the plug on Pivot, a Sprint joint-venture that offered wireless alongside TV, land-line,and internet service.

But sources tell The Journal that DT's Sprint bid could be weeks or even months away - if it comes at all. Should it acquire Sprint, DT would be forced to stomach some serious alphabet soup. T-Mobile's network uses GSM. Sprint's uses CDMA. And Nextel's uses iDEN. ®

Update

Sprint's woes continue. Word has just arrived that Qwest has dropped Sprint in favor of Verizon. In reselling Sprint wireless service, the big name land-line and internet provider accounted for 824,000 of Sprint's 53.8 million subscribers as of the New Year.

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