We already know that Sprint Nextel
But perhaps Sprint's savior will rise from Germany.
T-Mobile parent company Deutsche Telekom
And well-respected British newspaper The Daily Telegraph now reports that Deutsche Telekom is looking to repeat that deal Stateside. Folding Sprint into T-Mobile would transform two also-rans into an instant competitor to Verizon
The Telegraph is leaning on anonymous sources in the grand old Wall Street Journal tradition. There has been talk about a deal like this for a year or more, but serious talks started about three months ago. That sounds like an opportunistic play by Deutsche Telekom. Watching the Pre launch barely making a difference to Sprint, the Germans may have seen an opportunity to do a ride-by rescue on the cheap. Sprint's shares fell 28% between early May and last Friday, while the S&P 500 benchmark cheerfully recovered to the tune of 12%.
But the faceless insiders also noted that T-Mobile is looking at other ways to turn the sinking ship around as a standalone business. And there are many reasons why that is the more likely outcome here: The erstwhile partners run on vastly different network technologies today, and are committed to different next-generation technologies as well. Also, our regulatory bodies might not want the German government to hold a major stake in a company that holds about one-third of our mobile networks.
All things considered, I'd be very surprised to see T-Mobile joining forces with Sprint. The only major consolidation move that would make sense in the light of technical challenges and political pressures would be Verizon Wireless plus Sprint -- but the antitrust guys might not like that combination. So those Sprint shares should give back this rumor-induced 13% pop before too long.
That's just one Fool's opinion, of course. What do you think? Share your wisdom in the comments below.
Google is a Motley Fool Rule Breakers selection. Sprint Nextel is a Motley Fool Inside Value recommendation. France Telecom is a Motley Fool Income Investor pick. Try any of our Foolish newsletters today, free for 30 days.
Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.
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