T-mobile To Buy Sprint Rumor, Take 24

sprint_thumb

This rumor seems to pop up every time the wind blows in a certain direction. T-mobile wants to acquire Sprint, Sprint wants to acquire T-mobile, Sprint and T-mobile dance the Samba etc etc. Deutsche Telekom (T-mobile USA parent company) has a market value six times that of Sprint and while Sprint seems to be on a roll these days with a bounty of surprisingly affordable yet all encompassing plans combined with a super star winter lineup they hemorrhage customers at every turn. Any tech blogger or tech fan in general immediately jumps at the notion to point the incompatibility of the two company’s networks, CDMA and GSM. Considering Sprint doesn’t exactly have a strong record of accomplishment merging companies with incompatible networks we can at least be thankful T-mobile is leading this dance. That being said, there are still an unfathomable amount of questions as to how this would work, what would this do to the wireless landscape with only three major players. Telegraph UK, the newspaper responsible for this round of rumors reports that the Deutsche Telekom has called in Deutsche Bank in preparation for an offer for Sprint. This could get very interesting, very quickly and while the prospect of jumping right onto AT&T’s back with a customer base that rivals their own makes my heart fill with joy, that doesn’t mean it’s the smart play. If I were the boys at the FCC I’d want to see the best damn play by play integration schematic ever created by man on how exactly this merger would work.

Telegraph UK

Interestingly enough, this report comes hot on the heels of a PCWorld story, which all but bashed T-mobile USA proclaiming “T-mobile has little to offer US mobile providers.” Well sorry Tony Bradley, I disagree and I’m sure I speak on behalf of all Tmonews readers. While T-mobile’s 3G network continues to roll out at a furious pace onward toward its 2009 goal of 250 million POP’s it has yet to really turn the T-mobile image around. The dominant player in the Android game thus far has also failed to really give T-mobile the same type of customer rush AT&T has felt with the iPhone deep in its pocket. On the positive side, T-mobile continues to roll with JD power award after JD power award, for both customer service and call quality. Unfortunately, those awards don’t seem to materialize in significant gains for our beloved magenta. I received a very insightful email from a reader two days ago who made two very interest points that I would like to consider, 1) The Microsoft experience shows that inattention to details and poor user experience can relegate even a dominant player to the sidelines over time. On the other hand 2) Apple shows that even a small player with a well-developed idea can grow rapidly. With Sprint still suffering from the stigma of failed customer service and a plagued wireless network, with AT&T taking nothing but a beating in the press lately T-mobile is in the perfect position to capitalize on its strengths. For all its network awards, Verizon still suffers from the image of uber-expense and while T-mobile who rivals Verizon in almost every JD power award and has prices less than that of Verizon has yet to really exert that power. Forwarding customers to billshrink simply isn’t the right move, it’s not going to produce a sudden influx of millions of customers. That needs to happen by reputation, reliability and marketing. T-mobile needs to do more to showcase the strengths it has rather than its weaknesses and any good tech blogger worth a damn will tell you, pick the carrier first, and phone second. Whatever the end result of a Deutsche Telekom/Sprint Merger is, T-mobile USA needs to focus on the now, and what it can do without spending billions of dollars to swallow up one large competitor or a handful of tiny ones. Android is great, but it’s not the end all be all of wireless, T-mobile is ripe to make a move on both Sprint and AT&T without spending billions to acquire either. AT&T will continue to shoot itself in the foot with the iPhone network woes and Sprint, well Sprint will be Sprint and lose customers no matter what they bring to the table. So T-mobile, spend the money, don’t spend the money but acting fast to take advantage of one of the most exciting times in wireless isn’t just a recommendation right now, it’s a full blown necessity.

Tags: , , ,

  • J-Hop2o6

    So what will DT gain from acquiring Sprint?? they will have to spend billions (after they buy out Sprint) to switch Sprints unpopular CDMA with GSM tech.. i’m not expert at this, so can someone break it down for me?

  • http://thealchemistlab.com Patrick

    awesome! the coverge would be amazing. i could have a pre/pixie!

  • http://thealchemistlab.com Patrick

    1. TMO will be the worlds largest carrier..i think
    2. lots more money
    3. gsm everywhere!
    4.amazing coverge

    theres really no downsides to buying it except switching to gsm, but with all the new customers, great service etc, they will make it up so fast.

    ive seen prices around 10 billion dollars

  • laafiera

    Spend the money on the network…forget the rest!

  • skyline247

    I agree. What sense would it make for DT to acquire Sprint. They should invest the money in upgrading equipment and finalizing T-Mo’s 3G rollout. Keeping the current customer base happy should be a priority, at least it seems to me. But what do I know.
    I was with Alltel until the Verizon (takeover) merger.

  • Ant

    1. Tmobile gets more awesome
    2. We get the pre
    3. We get the hero :)
    hopefully that’s what I think will happen!!

  • darron

    great, well-written article. exciting to wait and see what happens…

  • Kickstar13

    I think this would be a great idea! T-Mobile will have to spend billions of dollars to convert the CDMA equipment to GSM but in the end T-Mobile will be making trillions with all the new customers and they would have amazing customers. I’d probably expect some nice devices as well. Not to mention the awesome coverage.

    I hope this is turns out to be true and not just a rumor. *fingers crossed*

  • Andrew

    It has been brought up already, but the severe limitation here is the cdma versus gsm technology. While DT could buy Sprint, it wouldn’t mean Tmobile USA and Sprint/nextel would merge. Not to mention that we wouldn’t be able to use most of their phones. So no, you would not be able to use the Sprint Hero, Pre, Pixie or whatever else on Tmobile. You would still need to switch carriers (look how complicated the Alltel Verizon merger has become, and they used the same technology). The only way I could see this directly improving Tmobile USA is in the implementation of WiMax, but even then, I would rather see LTE. All in all, this doesn’t interest me

  • bWayne

    I tend to agree with those who ask ‘what’s in it for T-Mobile?’.
    - Spectrum isn’t really required at this time. TMO has acquired a ton in the last year and they haven’t begun to use all of it. I’m not even certain the spectrum is compatible with TMO’s network.
    - Sprint customers aren’t exactly loyal so remaining contract term wouldn’t be worth more than base rate less unamortized subsidy.
    - Not worth the trouble to acquire equipment exclusivity contracts with handset manufacturers.
    - What about the old Nextel (iDen) network customers?
    - Sprint has been leasing their network to other customers (non-voice) in ‘bulk’. This would add complexity and potentially impact any plans.

    Hard to imagine what benefits would overcome the downside of such a transaction.

  • Danielle

    Readers:

    T-Mobile does not need to convert Sprint’s network to GSM. Why would they do that? Not only is that ubber expensive but completely unnecessary. HSPA + and LTE is their future not GSM.

    The biggest challenges would be to furiously grow their HSPA network as the backbone and adding enough capacity to handle an influx of users over time. Also, they’d have the challenge of getting HSPA capable handsets in as many hands as possible and eventually this will need to be forced. This can take a few years however and will not happen overnight.

    T-Mobile’s native network is similar to Sprint’s native network in size, but Sprint currently offers their subs in market roaming in more places which gives users the impression that they are on a bigger network. T-Mobile would have the challenge of making sure they either build out these network holes on their own or they’d have to open up roaming agreements with other GSM/HSPA providers in the interim.

  • iFloss

    I read that and i was just thinking on how much i loved t-mobile. As the time went by i just started getting tired and t-mobile is a great company and i’m sure they’ll start kicking ass soon but they’re far behind.
    And i’m switching to sprint because well i like sprint and that network just suits my needs and rubs me just how i want to be rubbed with services like TV, Radio and Music stores and dont forget they SOMEHOW seem to come out with the fastest 3G network out of all carriers done EVERY time.
    I’m going to miss t-mobile and when i thought t-mobile was the end all be all. They need to step it up though because that 100 dollar unlimited minute plan isnt working out considering you’ll end up dropping an extra 35 dollars for text and internet on an adolescent 3G network.

    And i didnt bash t-mobile because i keep telling people to join. But i think of t-mobile more as a first cell phone kind of company. And once you have that experience you can move onto the big boys and get a big boy phone with big boy services and tech. (I know sprint’s customer service is usually 3rd or 4th worse)

    Adios t-mobile but i doubt i’ll miss overpaying.

  • InfidelCastro

    If you’re in an area where Roger’s is a competitor you’d better embrace your future provider per agreement with the FTC. Verizon had to give up a bunch of markets after the Altel acquisition. That’s assuming any of this comes to fruition. If you’re Apple who are you going to shop the I-phone to in 2011 now?

  • J-Hop2o6

    @ Danielle

    i think ppl just blends GSM with W-CDMA/UMTS/HSPA/LTE since GSM is global and its upgrades were UMTS/HSPA/LTE, and GSM is like the originator or something

  • http://www.ahhyo.info Ahh Yo!

    Sprint needs to lose the Nextel. That was the worst investment they made. If anything, T-Mobile needs to buy Sprint. One more thing, I read this news back in 2007 around this same time. Sprints shares are so low, it would best for any cell phone company to buy them out.

  • J-Hop2o6

    damn i wish there was a edit button.. but i forgot to mention this… another reason why ppl still call 3G/4G GSM is maybe cuhz of the SIM cards.. also 3G (UMTS/HSPA) uses the core network standard as 2G (GSM/EDGE)

    http://en.wikipedia.org/wiki/UMTS#Technology

  • RCtennis3811

    T-Mobile rivaling Verizon Wireless in every JD Power award? Other than customer service and call quality in ONE region of the US, that’s not true. Verizon’s network gets 5 stars in all regions of the US; T-Mobile’s only gets 5 stars in the West – everywhere else, it’s about a 2-3 star rating.

  • eli_the_great89

    to Danielle.
    actually LTE is a GSM based 4G (Fourth Generation) technology.
    Verizon is planning on switching their CDMA technology over to GSM for their LTE 4G network.
    GSM is better since you can travel at a low cost with your mobile phone.

    this won’t make T-Mobile or Duetche Telekom #1 in the world since Vodafone and China Mobile still hold the top 2 world spots…but it sure would move the Telekom company up in the ranks.

    Still i can’t fathom Sprint being aquired by Duetche Telekom no matter how terrible Sprint may be.

    • Andrew

      Lets also add in that LTE could potentially make Wimax 4g look like a snail

  • Andy, Inc.

    T-Mobile really should focus on upgrading the network and expanding the 3G coverage. While merging with Sprint would bring more customers, they should first consider how much it will cost to convert the CDMA network to GSM/UMTS/HSPA. Also, since the network run different technologies, the merger wouldn’t be complete for a while since Sprint users would have to change their phones for work on T-Mobile so focusing on the network they currently have would make more sense

  • Brandon

    I was thinking of joining Sprint, and wondering who was better between Sprint and Tmobile?

  • raysilverstone

    I do hope that it does come down to T-mobile buying out sprint. The Sprint customers would defiantly be thrilled to have a much nicer customer service. Plus we would get the Hero

    I work in a connection center and not one carrier is perfect. I hear it every day. I do what i can to defend the sake of T-mobile. (the my friend gets me everything with the fact that my town does not have t-mo 3G he as At&t and has had 3G for a year). Verizon hardly gets any sales because they are to expensive. At&t Gets the most sales out of the 3 but the complaints come in as there phones not lasting long. T-mobiles gets a big complaint about coverage. Our north-west Avenue does not have any service. Flex pay is a big thing people like about T-mobile.

  • James

    im not sure if its been mentioned or not, but i have another idea. why not just skip trying to beat at&t by buying sprint and spending billions to convert cdma. why not just buy at&t? yes they were bought by cingular, and is technically cingular with the at&t name, a few years ago for 41 billion but what does the big pink t have to lose? offer up 45 billion for the company. at&t has almost 79.2 million subscribers, and the big pink t has 38.8 million. this deal would put tmobile in first over verizon’s 87.7 million giving at&t-mobile 118 million subscribers. a deal like this would benefit we the people so insanely much.

  • J-Hop2o6

    @ James

    I was thinkin about Tmousa + AT&T merger while ppl was talkin about Tmousa/DT + Sprint merger.. it’ll be easier since both are GSM based.. just aslong the prices WON’T go up, i’m more for that.. but DT will have to shell out alot to aquire AT&T..

    so what will be cheaper? an already GSM based company (AT&T), but will have to shell out more money to aquire them.. or a CDMA/WiMax based comapany (Sprint) that’s cheaper to aquire, but will have to spend ALOT to switch their network from CDMA/WiMax to GSM/LTE

  • yo

    tmobile would not have to convert everyone with a cdma hadset to a gsm one. all they have to do is start selling only gsm phones then as people upgrade to a new phone they will be on gsm. in 22 months most customers will then be on gsm

  • saintory

    IMO, it’s all about USA spectrum. Spectrum is much more valuable than equipment. If T-Mobile was to buy Sprint it could auction off the equipment wholesale and hold the spectrum at the same time convert existing customers to coverage that is very good and will improve.

  • jimbo831

    Why won’t this rumor just die already. It has been rehashed so many times over and it is just very unlikely to actually go through. I will eat crow if it does, but I’m writing this rumor off to the same unlikely rumor category as the last thousand times I’ve heard it.

  • umaluver

    Old news that was probably leaked again to take attention off of some other piece of important news…

  • Kickstar13

    @James
    I doubt DT will buy AT&T Mobility though that would be a very smart move on behalf of T-Mobile USA. Verizon would be left in the dust if T-Mobile merged with AT&T Mobility. I would love this to happen.

    I’m confident that DT will not purchause Sprint.

  • http://www.yoyoyo.com mixoplex

    Lets just it increases coverage everywhere and they don’t mess up the UMA cuz I ooops WE NEED IT !!!!!!!!!!!!!

  • RSTAR

    i doubt that Tmobile(DT) will be acquiring Sprint….period. These are rumors that have been going around for a yr. I will believe it when I see it officially announced.

  • Michael

    OR, is this an out-play for DT? They start talking about buying Sprint, pushing AT&T, etc…

    And then AT&T makes a defensive move and offers to buy TMO from DT? This keeps DTs dividend intact, maybe they become a stakeholder in a combined ATT/TMO. From a tech standpoint this certainly makes more sense than TMO/Sprint.

  • Jack

    im with sprint… and this is my first time hearing about this rumor, but there could be a reason why sprint’s touch pro 2 is obviously with the CDMA network but it is also GSM capable. Could it be that if sprint and tmobile merge, they could have both networks running on 1 device?

    • Andrew

      The TP2s for Verizon and Spring are both CDMA/GSM capable for international roaming purposes. They are marketed to business folk who have the possibility to travel abroad. At least, thats why Verizon does it, I would guess the same for Sprint

  • nokiabrock

    This might be a little off topic, but last year around this time rumors were floating around that Google was going to start mobile service for FREE on the new spectrum that was freed up by the digital TV transition. Service was supposed to start fall of 09. The big joke at the time was for free service your phone would always display ad banners or you had to listen to an ad before you made a call.

    Google did win that spectrum bid, right? So what do they plan on doing with it.

  • Luis

    to me everyone here has both a good and bad point on DT buying Sprint Nextel. the networks arnt compatible but man come on now wouldn’t it be great to see something that huge happen to the wireless world here in the USA. i do see DT buying Sprint just cuz of the T mobile UK and Orange merger that’s big money for DT right there.

    its funny i see the 2 networks working out in the end ….well 3 networks with the iDen from nextel but anyway.
    1 t mobile is working right now to upgrade to HSPA 7.2 then to HSPA 21 then they r still planing there LTE for 4G

    2 sprint is maybe idk 15% into there 4G with WiMax

    3 that iDen nextel network i have no clue what to say about that but lol someone can help me out with that after i post this…….

    so this is me thinking in my head if i was DT

    buy sprint / nextel leave there network (s) alone for now use the new money coming in complete t mobiles network upgrades to LTE sooner way sooner then later. then someone correct me if iam wrong but doesn’t t mobile USA have a bunch or a crap load of spectrum that they acquired awhile back and still haven’t used it as of yet. take that unused spectrum use it as LTE for sprint and trash sprints old network and there u have it…….

    that would work but yet again i forgot about all the sprint phones that use there network now…. idk but i still think there’s a way they can work all that out with out losing alot of money

    but yes i truly think DT will buy sprint nextel i see it happening

    anyone else has something to add to what i said go ahead

  • Luis

    and if t mobile and at&t were to merge wow that would be awesome but i see DT buying sprint more likely then at&t

    wait i forgot isnt it possible for t mobile to allow roaming on sprints network making it easier for both company’s to merge?????

  • Luis

    hey nokiabrock remember Google is doing the Google voice thing and ur able to use it on a cell phone making free calls and etc for free without paying anything but then again u need a phone signal or wifi.

    so that kinda counts as them as a mobile service as of right now…..

  • J-Hop2o6

    @ Luis.. T-mobile has roaming agreements with At&t and some other regional GSM carriers over the 850 band.. nothing with Sprint since their CDMA tech..

    http://en.wikipedia.org/wiki/T-Mobile_USA#Roaming

    Also.. someone mentioned above that DT can buy them out.. and once all Sprint customers switch their phones to GSM,, they can auction off Sprints spectrum’s (which he says spectrum’s has ALOT of value) to make back some of their money back..

  • Reyes-Paramore

    I LOVE THIS IDEA!!! THEY WOULDN’T EVEN HAVE TO CHANGE SPRINT’S NETWORK INTO AN HSPA OR GSM NETWORK!!! THEY COULD JUST BUILD TRI-MODE PHONES LIKE THE BLACKBERRY TOUR!! IT USES CDMA 850/1900, GSM 850/900/1800/1900 AND HSPA 2100!! THEY COULD START MAKING PHONES WITH CDMA 850/1900, GSM 850/900/1800/1900 AND HSPA 1700/2100 SO THAT THE PHONES CAN RUN ON BOTH NETWORKS AND WORLDWIDE THAT SOUNDS REASONABLE!! THEY COULD JUST USE BOTH INTERCHANGEABLY WHICH EVER GIVES THE BEST SIGNAL THE PHONE WOULD JUMP TO IT.

  • Pythagoras

    I just wanted to comment on PCWorld. Saying “T-mobile has little to offer US mobile providers” is the kind of writing that you see there all the time. They started sucking a long time ago. It’s like a collection of loose cannon propaganda pieces instead of reporting. Weird…

  • Rogue

    Im actually ok with this.
    Id like a merge between Sprint and Tmobile. Esp since Tmobile useed to be the cheapest carrier and now Sprint is.

    Im just a little confused on the CDMA though. Sim cards to my knowledge were GSM technology. Sprint has started to implement SIM cards into their phones, is that still CDMA? (I know this because I changed from Tmo to Sprint and my Tour has a SIM card.)

  • LP

    Totally Agree with Rogue, Sprint new theme seems to be attempting to become the new affordable carrier. And If DT took over Sprint it would be the easiest math i’ve ever heard. From want I know Sprint clients are allowed to use the Big V network meaning that there Network type are similar soooo.

    Step 1 . Acquire Sprint for Pennies ( there already bleeding customer anyway )
    Step 2.
    Step 3. Continue selling only GSM (3G/4G/LTE or whatever ) phones, while using obtain through selling the sprint’s old towers to further an quickly stabilize spread the LTE network
    Step 4. Glady receive all the customer porting back from At@t now that the iphone contract is finally over. 70+ million strong
    Step 4. Continue to make Shareholders happy!

  • LP

    Step 2. was to sell the tower to Verizon at low cost ( lower cost than if they built themselves )

  • Tasty Relish

    I am personally not a huge fan of any type of move like this. T-Mobile USA has taken a lot of heat in recent years for many issues. In my mind, it came back to the same thing always, and that is coverage. They tried to update their phone line-up, I feel the T-Mobile line-up can compete with any carriers. T-Mobile were knocked for not having 3G. T-Mobile has started making the jump, but it is all worthless. You drive around, and you have no coverage…that is the common experience I get with T-Mobile.

    What needs to happen is them spending 10+ billion dollars putting coverage in places they don’t currently have coverage. The phone lineup is good, the data is getting there. The coverage isn’t even close. Then as soon as they are completed with that, they can work on differentiating the data experience from what the other carriers have to offer. T-mobile has A LOT of work to do. Getting Sprint won’t do anything except give them more customers to jump ship at the start of that merger.

  • Robert_x24x

    I don’t think this will happen. And even if they do buy it out, it won’t merge T-Mobile and Sprint into one company name. They’ll still be seperate names/seperate carriers, just owned by one company. And they certainly won’t convert all the CDMA devices to GSM because 1) Way too damned expensive. and 2) That would render all current Sprint devices useless, unless they felt like giving all current Sprint phone owners a new, free GSM version of whatever Sprint phone they own(which I can promise will never happen). T-Mobile will not get the Hero, Pre or Pixi. Keep livin’ the fantasy.

  • MikeK

    Internal scuttlebutt is that this is more than a rumor – they might just be serious this time.

    From a purely practical point-of-view, this would not mean any kind of immediate merging of Sprint subscribers onto the Tmo network – too many technical hurdles to overcome right away. So no, you won’t see the Pre or Pixi in magenta colors anytime soon.

    Rather you would start to see an immediate change in terms of marketing and branding. At first integration will occur with internal systems – billing, customer service, etc. then slowly it will coverge onto a common platform (most likely GSM-based) as the technology evolves.

    What Tmo/DT really cares about is moving up from the #4 spot in terms of subscribership. This is all about increasing marketshare against ATT and Verizon, not technical compatibility.

  • BradH

    Everyone keeps looking at Sprint as having bad customer service, however most people are looking at old JD results and not looking at what the company is doing now. If you were to take a look at the customer service as it stands now I think a lot of people would be supprised.

    The true test will come in Q1 of 2010 when JD does its next big customer service report. I believe that Sprint will come out much better than what people believe they will.

    The customer service has changed, however the customer’s perception of it has not.

  • ZKahaZ

    Well, If T-Mobile purchases Sprint it would be because of the Data side! T-Mobile does not have a Strong Data Network while Sprint has lots of personal and business customers using the data cards for wireless internet. From there i guess they will figure a way to conver some customer to the new technology. Just remember before any buying there is a lot or reaserh done! And if T-Mobile purchase Sprint its to offer it’s customers more… How? They know! I heard from another BLOG that T-Mobile is talking with some banks, however this is not official yet, nor do I know how reliable that info is.

    Go T-Mobile!

  • Mike

    Children please. I’ve had T-mobile, I have Sprint. Honestly, Sprint has a better signal everywhere I go, Sprint has way better phones, Sprint phones come with and do way more(TV, GPS, NFL Mobile App – listen to any game and more), and Sprint’s customer service is good, not T-Mobile good, but I call them less so that’s a plus, and when I do call they are very nice. Don’t get me wrong, it’s T-Mobile’s customer service that kept me there forever, but now that I have a powerful network and a phone that rocks, it make me happy to be with Sprint. Knock them all you want, their network is bomb and their phones are too. BTW, they’re plans are better than T-mobile too.

  • Mike

    Also, as a follow-up. With so many posts of people who want the pre, who want the faster network, and who want the phones (Pre, Hero), why not just switch to Sprint. As for the merger idea, since I am with Sprint, I hope it doesn’t happen. I like having signal and I like having the NFL Network and NFL Mobile. Not saying T-mobile would get rid of those, but not saying they won’t either. People on T-mobile like it, People on Sprint like it, but I can’t see a good mix. Two different groups of users that want different things. Tmo going 3G, Spring already going 4G. Leave it be.

  • Bosoxfever

    I have Tmobile and my husband has sprint. I have perfect service, while his is always failing. I had sprint, nextel, cingular(now AT&T) and I like Tmobile. AT&T is too expensive, and Sprint/Nextel always ropped my calls and was ripping me off telling me I owed 210 when my bill was only 60-something and I never went over my minutes. My bill was NEVER the same amount. I understand bills can flux between 5-10 bucks a month, but a 100-200??? I left them and went to Tmobile and have never been happier. I hope they do buy out Sprint just so I don’t have to switch to Sprint and get a family plan (to save a few dollars, cuz he won’t switch to mine since he’s been with Sprint for 7 yrs). I think I just may stand firm and stay with my Tmobile. I never had any problems with them.