Report: Deutsche Telekom eyeing purchase of Sprint

Every year it seems that some foreign telecom company is in the running to purchase Sprint and this year is no exception.

According to a report in the U.K.-based Telegraph newspaper, German carrier Deutsche Telekom is interested in purchasing Sprint and could submit an offer that will likely at least match the $10.6 billion that the company is estimated to be worth.

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Deutsche Telekom is the parent company of U.S. wireless carrier T-Mobile USA, meaning that any purchase of Sprint would probably mean a merger of the two carriers. Sprint is the third-largest wireless carrier in the United States with an estimated 48.8 million wireless subscribers, while T-Mobile is the fourth-largest carrier with an estimated 33.5 million wireless subscribers. A merger between the two companies would help T-Mobile match the subscriber numbers fielded by wireless giants AT&T, which has approximately 78 million subscribers, and Verizon, which has approximately 86 million subscribers.

Deutsche Telekom was rumored to be interested in Sprint last year, when the company's credit rating was downgraded to junk status by Standard and Poor's. South Korean carrier SK Telecom was also rumored to have an interest in purchasing Sprint. In 2007, Sprint nixed a $5 billion investment offer from SK Telecom and buyout firm Providence Equity Partners that also would have installed former Sprint chairman Tim Donahue as Sprint's CEO. SK Telecom and Providence Equity partners had proposed the investment to Sprint earlier in the month in a letter written to the telco in tandem to Donahue.

Sprint has taken a major hit to its finances and market share in recent years, as the carrier not only posted an annual loss of $2.8 billion in 2008 but also lost more than 4 million wireless subscribers and wound up laying off 8,000 workers this past January. Sprint's competitors, meanwhile, all seemed to extend their advantages over the beleaguered carrier. Buoyed by the release of the iPhone 3G, AT&T added nearly 7 million wireless subscribers in 2008 while posting earnings of $12.9 billion for the year, a 7.7% increase over its 2007 earnings. Verizon, meanwhile, added 6.3 million wireless customers while posting a net income of $6.4 billion, a 16.4% increase from 2007.