By Allen Tsai | Sun Sep 13, 2009 7:51 pm |
Germany's Deutsche Telekom, the parent company of T-Mobile USA, is considering a bid for Sprint Nextel in a deal that could merge both struggling businesses into one, to better compete against larger rivals AT&T and Verizon.
The Bonn-based company has asked adviser Deutsche Bank to study a potential multi-billion-dollar takeover bid of Sprint and could make the offer within weeks."We've heard that rumor several times in the last months," said Andreas Leigers, a Deutsche Telekom spokesman. "It's our policy not to comment on market rumors." Sprint and T-Mobile have been struggling, competing with smaller carriers for lower-profit prepaid subscribers while rivals AT&T and Verizon have attracted valuable contract-signing customers. Last quarter, Sprint, the third-largest wireless carrier, said it shed 257,000 subscribers and reported a loss of $384 million. T-Mobile, the nation's fourth-biggest player, said its revenue fell to $5.34 billion from $5.47 billion a year ago. Should the deal goes through, analysts expect Deutsche Telekom to merge the two businesses into one, closely challenging AT&T's second-place spot with 78.2 million customers. Last week, Deutsche Telekom's T-Mobile UK business announced plans to merge with France Telecom's Orange UK arm to create what would be the largest British mobile operator.
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