USA: Deutsche sets eyes on Sprint

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Deutsche Telekom is reported to be bidding for US rival Sprint Nextel, shortly after its UK subsidiary T-Mobile announced it is to merge with Orange UK.

Media reports say Deutsche Telekom has appointed Deutsche Bank to advise on a purchase of Sprint, which is valued at $11 billion (£6.65 bn).

Deutsche Telekom cut its full-year profit forecast in April, partly due to a weak performance in the US, where T-Mobile USA is placed as the fourth-largest mobile network, behind Cingular/AT&T, Verizon, and Sprint Nextel.

Such a deal would put T-Mobile USA into number one position, as the merger with Orange has done in the UK.

Analysts said the move made sense as both companies had been losing market share and a merger would remove a competitor. However different network technologies and regulatory hurdles could make it difficult to pull off.

 

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