T-Mobile May Buy Sprint to Create Market Giant, Report Says
T-Mobile plans to acquire wireless carrier Sprint to better compete with giants AT&T and Verizon in the U.S, according to a report on Monday from the U.K.'s Telegraph.
T-Mobile's U.S. business is ranked only as the fourth largest carrier after AT&T, Verizon, and Sprint, but the reported Sprint acquisition would pit T-Mobile head-to-head with the U.S. market leaders.
According to sources quoted by the Telegraph, T-Mobile's U.S. owner, Deutsche Telekom, is looking into submitting a bid for Sprint, the third largest U.S. carrier, for a market valuation of $10.6 billion.
Expected in the next few weeks, the news of T-Mobile U.S.'s bid for Sprint comes merely days after Deutsche Telekom announced that its U.K. T-Mobile business will merge with France Telecom's Orange carrier.
In the U.K., the Orange and T-Mobile merger (third and fourth spots on the market), will create the country's largest wireless carrier, with a combined 37 percent share of the market. O2 and Vodafone have 27 and 25 percent of the market at the moment.
In the U.S, Verizon and AT&T are the leading wireless carriers, and acquisition of Sprint by T-Mobile would create a third giant carrier to challenge the supremacy of the current market leaders.
Vodafone, which also owns a 50 percent stake in Verizon, would suffer a blow in its home market, the U.K., where it will take the third spot; and also in the U.S., where a T-Mobile acquisition would put more strain on Verizon.
If T-Mobile goes on with the Sprint purchase, it will be interesting to see how Deutsche Telekom will manage the amalgamated networks standards in use by the two carriers. T-Mobile uses the GSM network standards while Sprint operates using CDMA technology.
It will also be interesting to see what sort of exclusive handset deals a new network resulting from a T-Mobile/Sprint acquisition would carry. T-Mobile is so far pushing hard on Google Android devices (T-Mobile G1, T-Mobile MyTouch 3G) while Sprint has the Palm Pre and the Google Android HTC Hero.