Slash LaneAccording 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.
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100 Comments
I'll post what I posted in Macworld, which had this story earlier:
"Well, this seems to be an idea fraught with problems!
How ARE they going to deal with the network problem?
Having both would be counterproductive, but switching Sprint over to GSM would cost tens of billions. It would cost less to move T-Mobile to CDMA, but why would they want to move away from the global standard?
I could understand this if Sprint was moving to the 4G standard that both AT&T and Verizon are moving to, but they aren't.
So what benefits will they derive?"
I'll post what I posted in Macworld, which had this story earlier:
"Well, this seems to be an idea fraught with problems!
How ARE they going to deal with the network problem?
Having both would be counterproductive, but switching Sprint over to GSM would cost tens of billions. It would cost less to move T-Mobile to CDMA, but why would they want to move away from the global standard?
I could understand this if Sprint was moving to the 4G standard that both AT&T and Verizon are moving to, but they aren't.
So what benefits will they derive?"
They wouldn't have any benefits other than the amount of customers. I went from sprint to t-mobile to At&t hopefully Verizon when the Iphone goes to their network. I hated Sprint they always and i mean always screwed my bill up, thus i went to t-mobile so for me personally sprint Sucks, t-mobile will SUck if the buy Sprint. and it will not have effect on AT&t with the iphone or Verizon because of the network. it would be a stupid merger and like you said it will cost sprint millions or billions of dollars to switch to GSM and im sure t-mobile will not switch to CDMA.
I'll post what I posted in Macworld, which had this story earlier:
"Well, this seems to be an idea fraught with problems!
How ARE they going to deal with the network problem?
Having both would be counterproductive, but switching Sprint over to GSM would cost tens of billions. It would cost less to move T-Mobile to CDMA, but why would they want to move away from the global standard?
I could understand this if Sprint was moving to the 4G standard that both AT&T and Verizon are moving to, but they aren't.
So what benefits will they derive?"
Legacy support. The two networks remain separate for some time. As they both move to 4G the entire CDMA system needs to be replaced anyway. The economies of scale would benefit the new larger company in advertising, accounting and customer support where they could eliminate the redundancies. As new customers come online they would likely be on the GSM side of the equation.
Legacy support. The two networks remain separate for some time. As they both move to 4G the entire CDMA system needs to be replaced anyway. The economies of scale would benefit the new larger company in advertising, accounting and customer support where they could eliminate the redundancies. As new customers come online they would likely be on the GSM side of the equation.
The economies of scale come from price gouging.
I'm sorry, no matter what people think, I just can't see Apple and Verizon working together. Verizon's obsession with crippling devices goes totally against what makes the iPhone great...