Sprint + T-Mobile: The odd couple of wireless
Unnamed sources have told the UK's Daily Telegraph that mobile network operator T-Mobile may be making a bid for Sprint some time in the "next few weeks."
If German-owned T-Mobile indeed goes ahead with such a bid, it will be a virtual repeat of its actions in the United Kingdom last week, when it announced its merger of operations with Orange Telecom. The two companies are the third and fourth largest wireless providers in the UK, just like Sprint and T-Mobile in the US.
Globally, T-Mobile's parent company Deutsche Telekom is one of the ten largest wireless network operators, recently counting over 149.8 million subscribers worldwide.
Sprint, which retains a third place position in the United States market, is being vastly outperformed by competitors Verizon Wireless and AT&T, and has spent the last year positioning itself for a comeback. As a part of the company's wider-flung initiatives to cut back on expenses, for example, Sprint announced in July that it had signed a seven-year agreement with Ericsson, where 6,000 Sprint employees became employees of the Swedish wireless company, and it took over the day-to-day services, provisioning, and maintenance of Sprint's CDMA, iDEN, and wireline networks.
Sprint has steadily lost more than a million postpaid subscribers per quarter for the last two years, but it has proven to be highly successful in the prepaid mobile market, gaining a record 777,000 prepaid customers in the last quarter alone. These gains, coupled with Sprint's acquisition of MVNO Virgin Mobile USA (and its 5.38 million subscribers) made Sprint the United States' second-largest prepaid wireless operator with nearly 10 million customers.
T-Mobile's gains in the United States have also been mostly prepaid customers. In the most recently completed quarter of this year, T-Mobile added a net 325,000 subscribers, and nearly 83% of those were prepaid.
Though the two companies are experiencing similar prepaid growth, the two companies are fundamentally different in their historical wireless technologies. A combined Sprint/T-Mobile wireless network in the United States would certainly be a ragtag affair. Sprint has traditionally followed the CDMA track, while T-Mobile has followed the GSM track, and the company's wireless devices could encounter compatibility issues as a result of their hybridization.
The rumor that Sprint and T-Mobile would combine has surfaced several times over the last couple of years, but the Telegraph's source said the companies began serious preparations approximately three months ago.