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T-Mobile, Sprint merger rumors resurface

Wed, 03/09/2011 - 7:20am
Maisie Ramsay, Wireless Week

The rumor mill is at it again. Now reports are emerging that Sprint Nextel has renewed discussions with Deutsche Telekom over a possible merger with T-Mobile USA.

The Wall Street Journal reported that the two companies were "again exploring options" but "there are hurdles that make a deal unlikely in the near term," citing anonymous sources familiar with the talks.

Bloomberg also issued a similar report stating that Deutsche Telekom had conducted talks with Sprint Nextel about divesting T-Mobile USA.

The possible deal is reportedly being held up by a disagreement over how much T-Mobile is worth, and who would own and lead the combined company. The talks between Sprint and Deutsche Telekom were spurred by T-Mobile's need to expand its 4G services.

T-Mobile currently markets its HSPA+ network as 4G but lacks the bandwidth to deploy LTE or WiMAX. Sprint and T-Mobile use different network technology and operate on different spectrum bands, which would complicate a possible merger of the companies' wireless services.

Rumors that Sprint is considering a merger with T-Mobile USA have circulated for years. Last summer, talk of a possible buyout flared when Sprint CEO Dan Hesse told The Financial Times that he saw "logic" in a combination of the two companies. Deutsche Telekom has said in the past that it is open to selling its U.S. division but has not made any direct moves to divest T-Mobile USA.

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