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T-Mobile May Make a Bid to Purchase Sprint
Last Updated on Tuesday, 15 September 2009 12:10 Written by Naota Tuesday, 15 September 2009 12:10
It is no secret that Sprint is struggling as a Wireless Cellphone Carrier. They have been reporting all kinds of losses and are still feeling the heat from their terrible acquisition of Nextel. With that said, Sprint is currently the third largest cellphone provider in the United States and has small subsidiaries residing in neighboring countries. T-Mobile (A subsidiary Deutsche Telekom) resides in fourth place and provides service to the UK, U.S. and has joint ventures in other European countries.
T-Mobile could gain a strong U.S. Pressence
Although Deutsche Telekom (DT) has been struggling in both UK and US cellphone sales, they are looking to restructure the company. The company has been focusing on restructuring, and as part of its restructuring, they recently valued Sprint at 10.6 Billion Dollars.
If both companies successfully merged together, the would almost tie AT&T as the 2nd largest cellphone carrier in the United States.
Conflicting Technologies Dramatically Raise Merger Costs
Although this may sound like an alright idea on paper, one has to realize that Sprint and T-Mobile use two different cellphone technologies. Sounds familiar? So did Nextel and Sprint! Sprint uses CDMA, a dying cellphone technology that sports higher quality phone calls but has far less popularity than GSM – the technology used by T-mobile and most of Europe/Asia, as well as AT&T. The cost of converting Sprint’s over to GSM would be astronomical. Not to mention that it could potentially render all current Sprint Phones useless unless costly, broadcast-converting technology is utilized.
To finance such a purchase, DT would need some huge loans or will have to sell a lot more stock.
What do you all think? As a current Sprint Customer I have mixed feelings. I am a big fan of GSM technology because of Sim-Cards and battery life. At least T-Mobile has cheap prices. PCMag doesn’t think its such a good idea and has listed Six Reasons Why T-Mobile Should Not Buy Sprint.