T-Mobile USA’s parent company has called in Deutsche Bank to advise it on the potential acquisition of rival operator Sprint, according to a Sunday Telegraph report. Sources told the publication that Deutsche Telekom could submit a bid for Sprint, which has a market valuation of US$10.6 billion, within the next few weeks. According to Wireless Intelligence data, a merger of Sprint and T-Mobile USA, the country’s third-and fourth-largest mobile operators respectively, would create a new number two player with 83 million subscribers (behind Verizon Wireless which has approximately 88 million). Such speculation comes hot on the heels of T-Mobile UK’s planned tieup with Orange UK, announced last week.
The Sunday Telegraph report is not the first article to link struggling Sprint to a takeover by Deutsche Telekom. The US operator has also been the reported subject of a deal with SK Telecom in recent months. However, any Sprint/T-Mobile deal would have to overcome regulatory concerns from a competition perspective, as well as the fact that both operators use competing 3G technologies. Shares in Deutsche Telekom fell 1.5 percent in German trading this morning as news of the report spread, whilst Sprint’s stock rose as much as 20 percent.
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