The tables have turned, and now it seems that Deutsche Telekom AG (DT), which owns T-Mobile USA, is in talks to sell its U.S. carrier to Sprint Nextel Corporation, under the condition that DT is given a major stake in the newly-formed conglomerate.
Over the last few years, there have been a number of reports that Deutsche Telekom was looking to buy Sprint Nextel.
Agreement Still Pending
Nothing is for sure yet, according to what the inside sources told Bloomberg, and the talks have been on and off. Apparently a point of contention is the valuation of T-Mobile USA, which saw a drop in profit during the fourth quarter, while Sprint and Deutsche Telekom shares rose.
On a more technical front, there is also the issue that Sprint cellular-wireless networks use the CDMA and WiMAX standards, while T-Mobile uses GSM and HSPA+, so consolidating their networks and customer bases may prove to be a challenge.
Previously, it had been Deutsche Telekom that was looking to buy Sprint Nextel, but the flipped scenario could still pose benefits for both companies. Sprint and T-Mobile are the third- and fourth-largest US wireless providers, respectively, behind number one Verizon Wireless and number two AT&T Inc., so a merging of the two companies could help them keep up with the competition; at the very least, it would make their combined entity closer to the size of AT&T and Verizon.