Rumor about Sprint and T-Mobile to merge

We have heard that T-Mobile and Sprint would merge to create a super third carrier to compete with ATT and Verizon before but a new report from BusinessWeek suggests the deal may be on track. The report says Deutsche Telekom is in discussion with Sprint Nextel to sell the fourth-largest US carrier in exchange for a stake in the new entity. If consummated and if it passed governmental scrutiny, the deal would create a new carrier that has roughly 70 million subscribers. By comparison, ATT and Verizon have more than 90 million customers, respectively.

The report doesn’t indicate that a deal is close and the haggling may be over what T-Mobile is worth. Despite the company increasing its 3G network by leaps and bounds and introducing cool handsets like the myTouch 4G, the carrier continues to shed subscribers. The last quarter was particularly painful because it had a net loss of the lucrative postpaid, long-term contract customers.

Of course, a Sprint T-Mobile merger would create a nightmare of networking problems that may be too much to overcome. T-Mobile currently uses GSM technology and HSPA+ for 4G while Sprint uses CDMA and WiMax for its 4G services. These are not interoperable, so you’re looking at dual-mode devices for this entity for the first few years.