Mobile merger report rings bells
Sprint Nextel‘s stock soared 11 percent before the market opened on a British newspaper report that T Mobile parent Deutsche Telekom had appointed Deutsche Bank to advise on a possible run at Sprint, valuing the U.S. cellular carrier at $11 billion.
Sprint certainly is a logical target for any company looking to boost its position in the very busy U.S. mobile market. It announced a large goodwill write-off in February 2008
And Deutsche Telekom is on the make. It signed a deal with France Telecom to combine the companies’ British mobile phone businesses — T-Mobile UK and Orange — last week.
A Sprint deal would make T-Mobile the top U.S. mobile company, but it would cost a bundle … and that’s just the up-front funding. Combining Sprint’s CDMA and T Mobile’s GSM technologies would take technological wizardry no less daunting than the magic the German carrier might have to employ in Washington to ensure a deal clears antitrust and other regulatory hurdles.
So while the hype could last through the day, any near-term excitement about a mega mobile merger could well be tempered by the time your next phone bill arrives.