T-Mobile Takes Aim at Sprint with Clearwire Investment Offer

Of course, this slow process of subsuming Sprint is why the Sprint board hasn't agreed to the T-Mobile offer as yet. There are a lot of people in Sprint's management that want the company to remain independent. But in the hyper-competitive world of wireless, it's not clear that remaining independent is even possible for Sprint. Of the four major U.S. carriers, Sprint is the third largest. But when you consider the real size of T-Mobile and its Deutsche Telekom mother ship, there's no comparison. Sprint is going to have a tough row to hoe to even stay even in this market without help. 

It's also important to note that Sprint and T-Mobile have a long history together. It's been a few years, but T-Mobile is the company that ended up with Sprint's GSM network when the latter decided to make the move to CDMA. That old Sprint Spectrum network that looked like it disappeared when Sprint made the changeover actually quietly became part of T-Mobile, and it serviced Sprint customers until they eventually gave up their CDMA handsets.  

As part of the process, Sprint and T-Mobile shared facilities for years. I've been told by some people at T-Mobile that a few old Sprint sites are still in use by both companies. While this sharing isn't that unusual—both companies also share sites with the other carriers—it does go back a very long time in wireless terms. 

Of course, a purchase of Sprint by T-Mobile wouldn't necessarily be a seamless process. The two carriers use different voice communications, Sprint with CDMA and T-Mobile with GSM. But Sprint also uses the old Nextel iDEN communications infrastructure for its push-to-talk service, and iDEN is a thinly disguised version of GSM. 

So what would happen if such a merger were to take place? Perhaps over the long run GSM would win out, but the real battle these days is for data communications, and if both T-Mobile and Sprint are sharing the same LTE technology delivered by Clearwire, it makes the path much clearer. It may not matter much if the voice services remain separate for a long time. Data is where the money is, and an investment by T-Mobile into Sprint's Clearwire could open up possibilities for both companies—at least until they become one company down the road.