Deutsche Telekom pondering Sprint Nextel takeover

Deutsche Telekom AG is mulling a bid to acquire Sprint Nextel, a deal that if consummated would establish the European communications giant's T-Mobile USA unit as the U.S. market's largest wireless carrier. Citing sources familiar with the matter, The Wall Street Journal reports Deutsche Telekom management is still debating the merits of a Sprint bid and may not act for weeks or even months, if at all. The U.S. wireless industry's third largest carrier, Sprint Nextel boasts a market capitalization of $22 billion after its revenue fell to $40.1 billion in 2007 from $41 billion a year earlier--the operator also booked a net loss of $29.5 billion in the fourth quarter due to a non-cash goodwill impairment charge of $29.7 billion. With 28.7 million customers at the end of December, T-Mobile USA lags a distant fourth, but a merger with Sprint would roughly triple its subscriber base and vault the company ahead of AT&T and Verizon Wireless. Two major obstacles loom, however: While T-Mobile USA's network operates on the GSM standard, Sprint relies on the rival CDMA format, posing an integration nightmare. There is also some question whether U.S. regulators would give their blessing to the deal. 

For more on the DT/Sprint rumors:
- read this Wall Street Journal article

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