Possible T-Mobile-Sprint merger could rival AT&T in subscribers
According to The Daily Telegraph, Detsche Telekom is prepping a multi-billion dollar offer for Sprint Nextel, which is the third-largest wireless carrier in America. Together, the two companies would have a combined customer base near AT&T's nearly 80 million subscribers.
Currently, AT&T is the second-largest wireless carrier in the U.S., behind only Verizon Wireless, which had an estimated 87.7 million subscribers as of July. While AT&T has lagged behind Verizon, the No. 2 company has been gaining ground, thanks, in part, to its exclusive deal for Apple's iPhone.
Sprint is estimated to have a market value of $10 billion. The formal bid from Deutsche Telekom is expected to be received within weeks.
The news comes as the international corporation also hopes to merge T-Mobile U.K. with Orange. Combined, those two British carriers would have 37 percent of the market with 28.4 million subscribers. That deal is reportedly centered on the possibility of gaining access to popular handsets, like the iPhone, by having a larger customer base for negotiation leverage.
The Telegraph notes that T-Mobile U.S. has struggled recently, with revenue falling and subscribers leaving for larger carriers that offer better coverage, like AT&T and Verizon, or smaller, regional carriers that cost less. But combined with Sprint, it would have a subscriber base of 78.2 million, just behind AT&T.
Such a merger would be difficult, as the two carriers operate on different style networks. AT&T and T-Mobile share a GSM network, while Sprint, like Verizon, operates primarily as a CDMA network. Deutsche Telekom has reportedly been eyeing Sprint for over a year, though "preparations" for the deal began within the last few months.
While still a long ways off, if at all possible, a T-Mobile-Sprint merger would change the landscape of U.S. wireless providers significantly. The iPhone's exclusive contract with AT&T is set to expire next year, which has led some to speculate that Apple's device could become available on a rival network. By and large, assumptions have suggested Apple would choose Verizon, the largest wireless provider in the U.S. But a combination of T-Mobile and Sprint would be nearly as large as AT&T, and perhaps a viable option for Apple to consider.