Rumor Redux: Deutsche Telekom Wants Sprint, But Why?

As one blogger notes today, if Sprint Nextel Corp. (S) CEO Dan Hesse was counting on the Palm Pre to save his company, well, that failed. Hence, here we are facing renewed rumors that T-Mobile USA parent Deutsche Telekom (DT) plans to buy Sprint.

And as another blogger points out, the news is being received with more skepticism than applause. After all, Sprint and T-Mobile run on incompatible networks (CDMA and GSM, respectively). The amount of money Deutsche Telekom would need to convert Sprint’s networks, devices and customers is close to unfathomable.

Yes, No. 1 provider AT&T Inc. (T) and No. 2 rival Verizon Communications Inc. (VZ) could use the competition, but what good is a combined Sprint and T-Mobile if they’re too busy messing around with integration?

Plus, Sprint has ongoing spectrum issues, a so-so WiMAX partnership, a pending takeover of MVNO Virgin Mobile and an unimpressive stock price. Speaking of that, though, Sprint’s shares today have taken off like Hesse after a new ad campaign. The company’s stock had soared more than 15 percent, reaching $4.34, by 1:09 p.m. Eastern on Monday.

With all those uncertainties at hand, would Deutsche Telekom really want to shoulder all of that? If it does, Sprint and T-Mobile together would boast 82.3 million subscribers, a number that would surpass Verizon. The status of becoming the second-largest wireless carrier in the United States would be welcome, surely, but would all of the problems be worth the cost and effort?

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