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Big Hurdles Face Proposed Sprint-DT Combo

 May 05, 2008 05:02 PM UTC
Symbol Sentiment Start Return Closed
S n/a
DT n/a

5/5 - "There are advantages to being bigger, like better access to hot, new phones, and economies of scale. AT&T's (T) position as the biggest U.S. wireless provider has no doubt helped it score exclusive access to Apple's (AAPL) iPhone, new RIM (RIMM) BlackBerries, Garmin's forthcoming Nuvifone, etc.

And Sprint's pretty cheap: Despite a 9% bump this morning, with a $24 billion market cap, its stock is still down 64% from its 52-week high, reached last summer. (Though whoever buys it also gets to take home $20 billion in debt.)

But there are big technical and organizational hurdles that could make a T-Mobile - Sprint combo a tricky one...The carriers use three different, incompatible wireless technologies -- Sprint uses CDMA for its cellphone network and iDEN for its Nextel walkie-talkie network, while T-Mobile uses GSM, the wireless technology that's most popular around the world...Sprint's already committed to building a next-generation network using a technology called WiMax, while other GSM carriers are leaning toward a rival, forthcoming technology called LTE....Competing bidders could emerge, driving up the price...A new owner won't quickly change the fact that Sprint is losing customers and is a financial mess. Its turnaround will be long and slow, and any technology transition won't speed it up."


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