There have been rumors circulating that T-Mobile parent company Deutsche Telekom is interested in purchasing the struggling Sprint-Nextel service.
T-Mobile, currently the No. 4 wireless provider behind AT&T and Verizon Wireless, has had an extremely difficult time competing with the two top providers. It’s possible company executives think a move to purchase Sprint will put it directly in line with AT&T VZW.
The report, recently published in the Telegraph, indicates a growing need for Deutsche Telekom to create partnerships and order buyouts of other companies. For example, the UK T-Mobile business is going to merge with France Telecom’s Orange wireless provider.
A recent editorial lists six reasons — ranging from technology differences and T-Mobile mistakenly absorbing Sprint’s problems — as justifications on why the acquisition doesn’t make sense.
Sprint remains silent about the deal, with an e-mail sent to T-Mobile unanswered.
Assuming U.S. federal regulators allow the deal to occur, the ability to put added pressure on VZW would make it worth the costly acquisition for T-Mobile. Although I’d be very interested to see how Deutsche Telekom handles the fact T-Mobile uses GSM and Sprint uses CDMA — one of the six reasons T-Mobile shouldn’t purchase Sprint.
Furthermore, T-Mobile has strongly supported the open source Google Android platform, with Sprint promoting at least one Android handset alongside the Palm Pre mobile phone. It’s likely Palm would support having its Pre and Pixi smartphone available to even more subscribers, but contractual issues would need to be closely investigated.