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.
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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.