Verizon Either Is, or Is Not, Close to Buying Sprint

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Recently, rumors have been circulating that Verizon Wireless is trying to buy Sprint PCS. At the same time, Sprint is reportedly trying to buy Nextel.

This morning, the Wall Street Journal reported that Vodafone, which owns 45 percent of Verizon, is in favor of the Sprint buyout.

However, Reuters is reporting that Verizon isn’t interested in any such deal.

Such conflicting reports are typical when huge deals like this are in negotiations. If talks fall apart, no company wants to look like it failed, or like it misled shareholders.

If negotiations really are going on behind the scenes, it isn’t clear how this will affect Sprint’s plan to buy Nextel, which is expected to be announced later this week.

Blame Cingular

This fall, Cingular’s buyout of AT&T Wireless went through, which appears to have set off something of a feeding frenzy among U.S. wireless service providers.

Verizon’s plan to buy Sprint makes a certain amount of sense. They are the two major carriers in the U.S. who use the CDMA standard; most of the rest use GSM/GPRS. Therefore a merger of their wireless networks would be a relatively simple task.

In addition, Verizon was the largest wireless carrier in the U.S. until all of AT&T Wireless’ customers were added to Cingular’s. A merger with Sprint would put Verizon back on top.

The Sprint buyout of Nextel will be much more complicated, as they use very different wireless standards. However, Nextel has many profitable business customers, and it’s likely that Sprint hopes to move these onto its CDMA network.

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