It’s no secret that T-Mobile USA isn’t in the best of shapes at the moment. The company lost 56,000 accounts last year while it started the year at number four of the top US carriers. All the other carriers gained users last year. So, it’s not too surprising that Deutsche Telekom, the German parent company of T-Mobile USA, is looking for a way to save the company.
According to Bloomberg, one possible way to solve the issues T-Mobile USA is facing is to merge the company with Sprint. According to anonymous sources, the two companies are in talks to form one company, with Deutsche Telekom as a major share holder. It seems the one thing that has been proven an issue with the talks has been the valuation of T-Mobile USA. It seems Deutsche Telekom wants more than what Sprint thinks the fourth-place carrier is worth. On analyst pegged the valuation at “well south of $20 billion, well below what Deutsche Telekom would look for.”
Of course, from a consumer point of view, the merger wouldn’t make much sense. Given that the companies use different standards, it’s not clear how they would merge. Perhaps all T-Mobile customers would have to switch over to Sprint, but that would leave all the T-Mobile GSM towers worthless. Perhaps the companies can work something out with the 4G plan (T-Mobile is talking to Clearwire, which Sprint currently uses), but for 3G and just voice, I don’t see how this could work out well for consumers.
Read [Bloomberg Businessweek]