How Deutsche Telecom Makes A Sprint Acquisition Work
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Ok, this has come up again. Deutsche Telecom, the company that owns T-Mobile in the U.S., is supposedly in talks to buy Sprint. The conventional wisdom is that Sprint uses both CDMA and iDEN, but T-Mobile uses GSM. That’s about like mixing oil and water. Sprint itself could not digest Nextel’s iDEN network, and it’s current financial woes can be partially blamed on it’s failed attempts at integrating Nextel’s network into Sprint’s CDMA network. It has the phrase charlie foxtrot written all over it.
However, I think I have an idea that might make this acquisition work. This is a technical/business solution and doesn’t even attempt to address the likely regulatory concerns that will come up.
While people get caught up on the technological differences between Sprint and T-Mobile, one thing Sprint has that T-Mobile can use today without converting a single customer is spectrum. Sprint has quite a bit of spectrum–spectrum T-Mobile could easily use to beef up their network. Obviously, there would be some cost in putting up GSM gear in Sprint’s existing tower locations as well as tying them to T-Mobile’s network.
As for converting customers? Run the CDMA, iDEN, and GSM networks as separate entities. Don’t integrate billing or customer service centers. Don’t spend a lot of time improving the CDMA and iDEN networks, either. Dump resources into expanding T-Mobile’s GSM network to match Sprint’s footprint.
Once the GSM (or maybe LTE by then) network is up to snuff, simply stop selling CDMA and iDEN services. Give customers great incentives to go GSM, including matching existing CDMA rate plans. Over the course of a couple of years, simply phase out CDMA and iDEN much like AT&T phased out TDMA not too long ago.
I have no delusions this process will be quick or painless, but I think it’s the only realistic plan for making it work. What do you think?
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Tags: cdma, gsm, sprint, t-mobile Fnord
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Comment by Alex
I don’t know. I mean, having Sprint currently I don’t think I want to move over to GSM. Granted, LTE could be awesome, but currently, I’m not a fan of T-Mo. From a network quality standpoint. I’ve just never been blown away by the call quality. Remember that the network they use in DC/Baltimore is what Sprint abandoned when it transitioned from Sprint Spectrum to Sprint PCS.
Excellent job pointing out how poorly the last merger of 2 incompatible networks turned out. I’d love to see more ideas, especially from DT/T-Mobile – you have to figure that they’re as tuned in to how badly Sprint/Nextel went/is going as anyone and have to have SOMEthing up their sleeve to even consider a purchase.
Great post.
- Alex
http://www.capitolvalley.net
Comment by spg
unlike with iDEN t-mobile may find that customers are happy to switch from CDMA to GSM as long as they fully develop UMTS/HSDPA prior to the migration. but the really interesting part would be turning XOHM(WiMAX) into one massive nationwide t-mobile hot spot.
but to be honest i would really like to see google or some other non-telecom entity end up with XOHM(and clearwire?)
Comment by PhoneBoy
For all we know, this is not much more than idle speculation. Not sure what’s different this time versus the other times it’s been discussed.
The point of my post, in terms of a “migration” strategy, is not to force a migration to GSM/UMTS/HSDPA/LTE until the network is up to snuff.
I have a feeling that any potential merger would involve the sale of some Sprint assets and spectrum in order to satisfy regulators. Perhaps Clearwire will get a nationwide WiMAX network out of the deal?
Comment by spg
it is hard for me to imagine the WiMAX spectrum as a possible sell off. it is exactly what makes sprint so interesting as an acquisition in the first place. on the other hand it may make quite a lot of sense for t-mobile to use the spectrum for LTE instead. that would be more consistent with their global strategy. it would actually not surprise me if sprint were acquired by a party interested in a pure data network who would sell off all the current customers. just a wild idea here: google(or microsoft or apple) buys sprint and sells off the customer base to verizon and alltel(because they have the compatible networks) and than uses both existing CDMA infrastructure and WiMAX to offer a pure data service(free?)
Comment by PhoneBoy
Who knows how this will all play out. Could be interesting…
Comment by spg
this is interesting:
http://gigaom.com/2008/05/06/clearwire-wimax-32-billion/
Comment by PhoneBoy
And my response to that:
http://www.wireless-weblog.com/50226711/sprint_ceding_wimax_to_clearwire.php