Get ready for a potential Sprint and T-Mobile Merger!

September 18th, 2009 - 09:01 am by Wajiha H.
Germany's Deutsche Telekom is the parent company of T-Mobile USA, which unfortunately is going through a rough phase these days as far as business is concerned. To combat this Deutsche Telekom is seriously considering a bid made by Sprint Nextel to merge with T-Mobile USA. It is being said that this merger, if happens can make T-Mobile compete better with larger rivals AT&T and Verizon. The Company has also sent a copy of the multi-dollar takeover bid of Sprint to the Deutsche Bank for them to analyze it in detail.
Sprint, T-Mobile Merger?!

While the rumors are surfacing about the potential merger, the officials of the Bonn-based Telekom refuse to comment on it. As said by Andreas Leigers, a Deutsche Telekom spokesperson, "We've heard that rumor several times in the last months. It’s our policy not to comment on market rumors."

Both Sprint and T-Mobile are these days struggling to compete with comparatively smaller carriers whereas larger rivals AT&T and Verizon have been flourishing as they have been able to attract some real lucrative contract-signing customers.

According to the last quarter report, Sprint, the third-largest wireless carrier, reported a decrease of almost 257,000 subscribers and also suffered a loss of around $384 million. On the other hand the fourth largest wireless carrier, T-Mobile, suffered a loss of around $0.13 billion. It is evident that they both need help and can prove to be great if merged together.

Now if the deal is officially materialized, the merger can prove to be a great challenge for the second-largest carrier, AT&T's with around 78.2 million customers.

The UK wing of T-Mobile has already made clear its intention of merging with France Telecom's Orange UK arm, a unison which can make this the largest carrier in the UK.

While T-Mobile USA is no doubt in deep trouble but the fact that it is backed by Europe’s largest telecommunications company, Deutsche Telekom, is something that shouldn’t be taken lightly.

The frequencies on which both of these companies operate are different but even then experts are saying that the merger announcement might just be announced in a few weeks time.