Is T-Mobile Interested In Buying Sprint?

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Is T-Mobile Interested In Buying Sprint?

Postby Administrator » Sun Mar 09, 2008 11:49 am

I'm not sure how I feel about this. When Sprint bought Nextel, I thought it was an odd deed. After all, their wireless technologies are about as different as any other opposite end tech... bad decision I thought. Now, if this Tmo/Sprint merger is for real, it CANT just be about tryingo to avoid a price war - Tmobile needs to put into motion a plan that will unify the brands technology wise. Maybe with phones that can handle both CDMA/GSM technologies, or maybe just owning them is good enough?-- I dont think so. Verizon should just step in and buy them out - or in two years, Tmobile will be in the same situation as Sprint. Bad move Tmo. Dont even think about it.

According to the “anonymous Wall Street professional” who writes Seeking Alpha’s Notable Calls blog, a rumor started late yesterday that Sprint “has hired Morgan Stanley and initiated director Ralph V. Whitworth’s plan to spin-off Nextel” and that we should expect the announcement in the next two to four weeks.

I’m not really convinced that ditching Nextel’s going to help Sprint turn things around but Sprint does a lot of crazy things (like buying Nextel) and there’s new management in place, so anything’s possible.

Speaking of anything being possible, there’s also some loose talk going around that T-Mobile might be looking acquire Sprint in order to avoid a price war.

According to analysts at Merrill Lynch, the possibility that Sprint might cut subscription prices to attract new customers puts T-Mobile in a tight spot, since it’s currently the go-to mobile company for cheap phone service.

“In such a price war scenario, we think T-Mobile would face the most pressure, and Deutshe Telecom would see the increased urgency to drive market repair,” according to the Merrill Lynch report. The report continued to say that the weak U.S. dollar and Sprint’s low stock price makes the deal seem viable.

If you thought the Sprint-Nextel merger was a mess, consider a T-Mobile-Sprint-Nextel merger and how it would affect current customers. The fact that the Sprint and T-Mobile networks are so different technologically makes me think this is pure, unadulterated speculation and, admittedly, Merrill Lynch said that it’s not aware of any acquisition discussions taking place — the firm just strongly feels that it’s a possibility.

Personally I’d rather see a nice consumer-friendly price war, wouldn’t you?

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