There was renewed speculation that Deutsche Telekom has held talks with Sprint about the merger of their US mobile operations, in a move that would unite the third- and fourth-placed US operators to better tackle market-leaders Verizon Wireless and AT&T. According to Bloomberg, the talks have been “on and off,” with the companies unable to agree on the valuation of T-Mobile USA. It was suggested that the proposed price is well below what Telekom is looking for – meaning it would hold a smaller stake in the combined business. The report said that Timotheus Hoettges, CFO of the Germany-based company, had acknowledged that “in general, all options are open in the US – the sale of the whole business or parts.” While T-Mobile is currently losing customers in the US, Sprint has recently managed to turn itself around somewhat, putting it in the stronger bargaining position. A deal would also be subject to regulatory approval.

While the combination of Sprint and T-Mobile would undoubtedly gain scale to better challenge its rivals, the integration of the businesses would not be simple. While the companies could stand to benefit from commonalities in many core functions, the fact remains that the network infrastructure used by the two are vastly different. Sprint is currently in the process of phasing out its iDEN network and renewing its CDMA infrastructure, and supports WiMAX for its 4G services through affiliate Clearwire (although a move to LTE technology appears likely at some stage). T-Mobile USA, in contrast, uses GSM/HSPA+ to serve its customers, and does not own suitable spectrum to launch next-generation mobile broadband based on LTE. T-Mobile already has some experience of in-market consolidation, however, having combined its UK operation with Orange UK to create market-leader Everything Everywhere.