Sprint T-Mobile: New mega-carrier or four-network nightmare?

Though the integration issues would be formidable, Merrill Lynch analysts say T-Mobile USA’s owner Deutsche Telekom might be interested in buying Sprint. But while such a deal might make financial and strategic sense, analysts said Sprint could become an operational nightmare for its new owner.

Merrill Lynch said Sprint’s operational problems might cause it to dramatically cut prices, which would put it in direct competition with T-Mobile USA, which has staked out that position among the big-four U.S. mobile carriers.

A takeover bid, Merrill Lynch analysts suggest, would avert such a price war. A positive: Sprint’s stock is priced low, while Deutsche Telekom could count on relative strength of the Euro.

Of course, the big objection has been the operational complexity. Sprint now operates three distinct networks with different air interfaces. Adding T-Mobile would make four. Ultimately, Long Term Evolution would the unifying air interface for all but the iDen network used by Nextel. But Nextel could be spun off.

It might be a long shot. But nobody thinks the market is stable at the top.

Sprint T-Mobile: New mega-carrier or four-network nightmare?