Sprint Nextel (NYSE: S) and T-Mobile Merger Rumors Return After Comments from Sprint CEO

Sprint Nextel (NYSE: S) and T-Mobile may be moving toward a merger as Sprint builds out its 4G network, said the Financial Times suggests in an article published Tuesday.

According to the report, Sprint Nextel CEO Dan Hesse told the agency that he sees “logic” in a potential merger between Sprint and T-Mobile USA. He said that if the two companies were using the same 4G technology, that consumers would benefit. Hesse declined to comment further on any merger details and Deutsche Telekom (owner of T-Mobile USA) CEO René Obermannhas said that there wouldn’t be any “multibillion” euro deals this year.

Sprint Nextel has partnered with Clearwire to build a 4G wireless network using a technology called WiMax, which is now available in 43 markets. Last month, Sprint Nextel launched its first 4G smart-phone, the HTC Evo, but component issues have caused shortages nationwide at many retail locations.

When discussing whether or not Sprint would eventually move to LTE 4G technology being used by Verizon, Hesse reaffirmed statements he previously made. “We have the spectrum resources where we could add LTE, if we choose to do that, on top of the WiMax network,” he told the Financial Times. “The beauty of having a lot of spectrum is, we have a lot of flexibility.”

Verizon’s LTE network is likely to go live in 25 to 30 markets by the end of the year. Most other GSM carriers around the world, including AT&T and T-Mobile, plan to make use of LTE in their next-generation wireless networks.

As competition between AT&T and Verizon heats up, there’s been speculation that Sprint and T-Mobile USA will join forces. In 2009, rumors surfaced that Deutsche Telecom would consider buying Sprint and merging the two operators, but the two companies make use of different cellular technologies. Sprint uses CDMA and EVDO on its network and T-Mobile makes use of HSPA and GSM on its networks. Merging the two networks would likely be a costly and difficult endeavor.



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