In one of the strangest stories to hit the mobile space in quite some time, T-Mobile USA’s parent company, the mobile giant Deutsche Telekom is rumored to be in talks with Sprint/Nextel about an acquisition.

This sounds hardly likely for a multitude of reasons- first and foremost, the technology isn’t compatible with their current GSM networks. Sprint, being a CDMA carrier, uses completely different frequencies and protocols- the network could never integrate together into one, and would have to be operated as two independent providers. Sound familiar?
Yeah. Sprint did that when they bought Nextel. Nextel was built around yet another competing technology, called iDen, which was famous for its excellent push-to-talk service. When Sprint’s own attempt at a Push-to-talk service didn’t catch on (anyone remember ReadyLink?), the company made a bold move and just bought up their competitor Nextel.

Not only did the move baffle users everywhere, it apparently baffled themselves as well. What was Sprint supposed to do with Nextel? Consolidate into one network? Not possible!
How do you juggle two networks that have nothing to do with each other? The phones aren’t compatible, the towers and infrastructure are different… you’re basically left with one company trying to run two independent networks along with a totally separate lineup of phones.

Sure, Sprint/Nextel tried to make it work with their hybrid phones (superior voice & data of CDMA, instant walkie-talkie chirp of Nextel), but that unfortunately didn’t catch on as well as planned, and it didn’t help solve the infrastructure problem of maintaining towers for both.

In fact, Sprint CEO Dan Hesse was recently interviewed by Charlie Rose, and asked if he thought the Nextel aquisition was a bad idea. His response? “In 20 / 20 hindsight, it was, yes… the premium that Sprint paid for Nextel was too much.”

There is a lesson to be learned here. Competing technologies don’t blend together well. So why on earth would one of the largest GSM providers in the world be interested in purchasing the very same US provider guilty of that very mistake?
What could they possibly do with it?
Imagine- T-mobile, together with Sprint, together with Nextel. Three totally different, totally incompatible technologies with different phones and different towers, trying to be maintained by one parent company.
No, this sounds like a hoax.

But isn’t it true that Sprint was planning on selling their Nextel division? Perhaps Deutsche Telekom is interested in just that?
Still rather unlikely. Even though iDen and GSM both use SIM cards, their similarities end there. They would still have the dual-network problem to tackle, although admittedly this is better than a triple-network to tackle. Still, why would D.T. want to take on Sprint’s headache, especially when they admit it wasn’t worth it?
Numbers.
It could very well be that D.T. wants a stronger US presence. T-mobile USA is currently in 4th place as far as subscribers for national carriers. Unlike Sprint, D.T. has very deep pockets due to its worldwide presence, and the sheer number of subscribers may be worth trying to maintain both networks, even if it is not profitable at first. Still, it sounds far fetched, and besides the rumor circulating is about Sprint/Nextel, not just Nextel.

So, no one will ever buy Sprint?
No, I’m not saying that. Sprint has been losing money according to its financial reports, however Deutsche Telekom seems like a poor suitor. Fellow CDMA carrier Verizon seems more like a viable option, especially seeing how they recently bought and are merging networks with CDMA carrier Alltel.

Still, despite financial reports, Sprint appears to keep on pushing ahead with new technology and exclusive handsets… and has no sign of slowing. It is my personal opinion that Sprint itself will be around for some time still.

Still, at the mere mention of this news, Sprint’s stock jumped 11%. While I find the whole thing very unlikely, it would seem that at the very least some investors have reason to believe. Or… like so many other rumors in the wireless industry, this could just dissipate and be forgotten a month from now. We shall see…