Rush for wireless airwaves may drive risky deals

In the telecommunication industry's land grab for wireless airwaves, investors better brace for US deals that are bewildering -- or worse.

To stay competitive with powerhouses Verizon Wireless and AT&T Inc, smaller and mid-sized telephone companies are badly in need of more wireless airwaves to handle the rising Web traffic demands of smartphones and tablet computers. That may leave operators little choice but to consider partnerships and full-fledged mergers. "If you don't have enough spectrum, how are you going to compete? You've got to force M&A ahead of that," said one telecom banker who asked not to be named due to lack of authorization to speak publicly on the topic. For now, most of the chatter surrounds Sprint Nextel, the No. 3 U.S. mobile service, and its smaller rival, T-Mobile USA. Both are looking at ways to beef up their networks. There is no easy answer, analysts say, with all of their possible moves full of drawbacks.