Deutsche Telekom could be forced into arms of Sprint

Deutsche Telekom may be forced into a tie-up of its T-Mobile unit with Sprint Nextel after a $39 billion deal with AT&T collapsed.

While Deutsche Telekom is now walking away with a $6 billion breakup package, its chief executive Rene Obermann has lost a lot of time and will now have to invest in the U.S. market or find a new way to exit the country, an option analysts regard as unlikely. T-Mobile USA "is just crying out for a merger with Sprint. That's the only long-term solution for Deutsche Telekom," Will Draper, head of telecoms research at Espirito Santo, said. T-Mobile USA, a growth engine in its early days but now a run-down asset, is badly lacking in the spectrum it needs to build a network capable of handling the vast data volumes that U.S. consumers and businesses use on smartphones. Bleeding money and losing customers, it ranks fourth among U.S. carriers behind AT&T, Verizon and Sprint.