T-Mobile Considers Sprint Mobile Phone Acquisition

Sprint Nextel, whose shareholders lost $29.7 billion from a fourth-quarter write-down, could see its future in the independent hands of T-Mobile.

Merrill Lynch analysts are suggesting that Deutsche Telekom, which owns T-Mobile, may consider acquiring Sprint to block a price war in the mobile phone industry.

Sprint Nextel’s financial status may force it to cut prices to attract customers which would put pressure on T-Mobile.

Far more speculative still was a report on Seeking Alpha, which said it had heard a “curious” rumor that Sprint had hired Morgan Stanley to explore options to create a new mobile phone company out of Nextel.

All the chatter follows the company’s official announcement last month that it would likely have to write off most of the remaining balance of $30.7 billion in non-cash goodwill value from its $35 billion acquisition of Nextel.

The write down was essentially an acknowledgment by the sister company that Nextel wasn’t worth nearly what Sprint paid for it three years ago.

Sprint Nextel has struggled since the merger, plagued by technical problems, unfocused marketing and a difficulty in getting both work forces into a cohesive whole.

The company has lost more than 60 percent of its value since June 2007 to fall far behind rivals AT&T and Verizon Wireless.