How Deutsche Telecom Makes A Sprint Acquisition Work
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?