Mobile mergers make little sense

15Sep09

UK paper the London Telegraph reported on Friday that Deutsche Telekom (T-Mobile in the US) is considering making an offer to buy mobile competitor Sprint/Nextel. Though the numbers – 82.3 million subscribers, and moving ahead of AT&T in the US market to the number 2 spot – make the deal look sweet as can be, the arguments against success are compelling.

According to an article in Business Week entitled “The Case Against Buying Sprint Nextel,” the authors argue that the process of integrating the now-incompatible networks could be impossible to overcome, even if the deal were to be approved by regulators. And that’s only IF the deal is approved.

Even if the deal with DT doesn’t move, there is some speculation that Comcast should step in, what with the $4 billion in cash they’ve got sitting around, and the mobile expertise they’ve got in Dave Williams, former CTO of European cell company Telefonica O2.

Then again, the competition that mobile networks are getting from VoIP services may make an acquisition by anyone a short-sighted gain. And with the almost unbelievable usage stats on text messaging, we may wonder in a few years whether the battle for the latest “G” network is worth the investment in infrastructure, much less trying to integrate technology for a majority of subscribers – most of whom are moving away from money-making voice communications anyway.

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