T-Mobile on desperate rampage: Bids on Orange in UK, now Sprint in US?
Deutsche Telekom, the large German-based carrier that is struggling to compete in the U.S. market with its T-Mobile subsidiary, is mulling a bid on Sprint, according to the British newspaper Telegraph.
“Sources said Deutsche Telekom could submit a bid for Sprint,” the report says, adding that the deal could happen within the next few weeks. This sounds pretty speculative — companies talk all the time about doing deals together. Still, a merger of the two companies would appear to make sense.
The United States has four large carriers. Sprint and T-Mobile are the third and fourth, respectively — trailing leaders Verizon and AT&T. We’ve argued before that Sprint and T-Mobile could get put out of business if they don’t watch out.
Deutsche Telekom chief executive René Obermann has promised to reverse the fortunes of T-Mobile UK and T-Mobile US, two units that have resulted in a huge €1.1 billion loss for the first quarter alone.
Deutsche Telekom is worth $60.45 billion, while Sprint is valued at $10.6 billion, so the combined company would have a stock market value of at least $70 billion.
Notably, this comes after Deutsche Telekom has already proposed a deal to merge T-Mobile UK and Orange, which would create the UK’s largest carrier with 37 percent of the market, ahead of O2′s 27 percent and Vodafone’s 25 percent.
It should be noted that rumors like this often come from the banking community. Bankers have an incentive to drum up publicity of a possible bid, in order to scare out other offers. Banks get paid a big commission when they complete a deal. The Telegraph notes in the first paragraph of its story that Deutsche Bank is the bank managing the possible bid.
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About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
