Here's the headline from the Wall Street Journal
The downside would be the enormous cluster-fudge of networks. They'd have GSM, iDEN, CDMA and almost Wi-MAX.
We saw what happened when two companies "merged" (they called it a "merger of equals" but it was more of a buyout) that were running different networks. We're talking Sprint and Nextel, duh. There was no real plan for consolidation. Constant changes of direction haven't helped. Sprint used to be number 2 in what was the Big 5 (the lineup used to be AT&T, Sprint, Verizon, Nextel and T-Mobile) and Sprint's stock was in the low $20 range and generally on the rise. Since the merger both sides of Sprint/Nextel have seen literally millions of subscribers and billions of dollars evaporate.
What I'm getting at is that DT/T-mobile seems to have its head on straight. Other than the change from VoiceSteam to T-Mobile (which was done in the relative infancy of their US debut) they've never suffered an identity crisis (LikeAT&T Cingular AT&T) and never had to transition from one network to another (like AT&T from TDMA to GSM or Nextel from TDMA to iDEN or Sprint from GSM to CDMA). Unless they have a very clear roadmap for what they're going to do with their customers in regards to network there are going to be massive problems with a buyout of Sprint. I would have to imagine that it would be something along the lines of moving their GSM customers to CDMA (most of their GSM handsets have a CDMA almost-twin). Next would be either rolling out a nationwide Wi-MAX network for Wi-MAX airacrds and CDMA handsets that connect to Wi-MAX for data or potentially work in a dropping of Wi-MAX entirely and rely on EVDO for its data needs. Because of the incentives usually offered to switch to the "favored" network, it would seem cheaper to abandon GSM. However, GSM is more globally accepted and is a cheaper overall network. I hope that if they merge they stick with CDMA because frankly, I've never been impressed with the call quality I've had when talking to someone with T-Mobile and never been anything but impressed with the call quality I've had with Sprint.
Also, they'd need to work dropping iDEN into that plan too.
Except for the part where Sprint is saying Wi-MAX and VZE is saying LTE for 4th gen data a Verizon buyout of Sprint would make so much more sense, especially because Wi-MAX is still in a test deployment.
I'll admit, as I usually will, that I don't have any kind of degree in anything. What I do have is experience. I experienced the Sprint/Nextel merger first-hand and know how poorly it was handled. It took them 3 years to decide that they should use the near-billion dollar city-sized campus in Kansas as their HQ (which also allows them to pay relocated employees less in accordance with their policy for reducing pay when transferring to an area with a lower cost of living) instead of the campus in Reston, VA (which is still only partially vacated). They're just now, also three years later, rolling out handsets that will allow iDEN customers to completely move over to CDMA as opposed to the hybrid units that reduce iDEN traffic but don't really address the need to get rid of the entire network. Any plan that came out didn't seem like it was that well planned and was then changed before it had a chance to take hold. I have to assume that if I can see the huge potential for ginormous fail that the brains behind Deutsche Telekom must have as well.
If the buy happens (and it's a really, really, really big "if") it needs to be done with more planning, commitment and follow-through than would be needed in the acquisition of a competitor using the same type of network. With Sprint's stock $30 away from the top 2 (AT&T and VZW) and DT's better, but not amazing in the upper teens, a poorly handled Sprint acquisition could very well put the new company in dire straights very quickly. Were that to happen we could very easily see the Big 4 very quickly become the Big 2.
Deutsche Telekom AG is weighing a bid to acquire Sprint Nextel Corp. that could catapult the German telecommunications giant's wireless arm, T-Mobile USA, to the No. 1 position in the U.S., according to people familiar with the matter.
The downside would be the enormous cluster-fudge of networks. They'd have GSM, iDEN, CDMA and almost Wi-MAX.
We saw what happened when two companies "merged" (they called it a "merger of equals" but it was more of a buyout) that were running different networks. We're talking Sprint and Nextel, duh. There was no real plan for consolidation. Constant changes of direction haven't helped. Sprint used to be number 2 in what was the Big 5 (the lineup used to be AT&T, Sprint, Verizon, Nextel and T-Mobile) and Sprint's stock was in the low $20 range and generally on the rise. Since the merger both sides of Sprint/Nextel have seen literally millions of subscribers and billions of dollars evaporate.
What I'm getting at is that DT/T-mobile seems to have its head on straight. Other than the change from VoiceSteam to T-Mobile (which was done in the relative infancy of their US debut) they've never suffered an identity crisis (Like
Also, they'd need to work dropping iDEN into that plan too.
Except for the part where Sprint is saying Wi-MAX and VZE is saying LTE for 4th gen data a Verizon buyout of Sprint would make so much more sense, especially because Wi-MAX is still in a test deployment.
I'll admit, as I usually will, that I don't have any kind of degree in anything. What I do have is experience. I experienced the Sprint/Nextel merger first-hand and know how poorly it was handled. It took them 3 years to decide that they should use the near-billion dollar city-sized campus in Kansas as their HQ (which also allows them to pay relocated employees less in accordance with their policy for reducing pay when transferring to an area with a lower cost of living) instead of the campus in Reston, VA (which is still only partially vacated). They're just now, also three years later, rolling out handsets that will allow iDEN customers to completely move over to CDMA as opposed to the hybrid units that reduce iDEN traffic but don't really address the need to get rid of the entire network. Any plan that came out didn't seem like it was that well planned and was then changed before it had a chance to take hold. I have to assume that if I can see the huge potential for ginormous fail that the brains behind Deutsche Telekom must have as well.
If the buy happens (and it's a really, really, really big "if") it needs to be done with more planning, commitment and follow-through than would be needed in the acquisition of a competitor using the same type of network. With Sprint's stock $30 away from the top 2 (AT&T and VZW) and DT's better, but not amazing in the upper teens, a poorly handled Sprint acquisition could very well put the new company in dire straights very quickly. Were that to happen we could very easily see the Big 4 very quickly become the Big 2.
"(like AT&T from TDMA to GSM or Nextel from TDMA to iDEN or Sprint from GSM to CDMA)"
Not to be too pedantic, but GSM and iDEN are TDMA based protocols; I think you likely meant AT&T's switch from IS-136 (an early TDMA based technology) to GSM. Further, as far as I recall, and I maybe incorrect, Nextel, in it's digital form, was always iDEN since their entire core technology was/is based on Motorola's proprietary protocol.
At the World Radiocommunication Conference, the U.S. Fought tooth and nail to get Wi-Max approved as an international standard, and the spectrum it needs is pretty well available. Wi-Max doesn't operate on 700Mhz. Sprint is the "king of Wi-Max." Verizon has been betting on 700Mhz, but the rest of the world isn't shutting off their Analog TV for quite some time.
T-Mobile + Sprint == INTERNATIONAL Wireless Broadband, out of the box.
thats for sure, man