Sprint: looking at Deutsche buy, Nextel spin off?

Rumour mills are great fun. And there’s been some great rumours coming out of the US mobile industry in the last couple of days, both concerning Sprint Nextel and what might be its next move in the face of some ongoing financial troubles.

The first rumour comes from suggestions by analysts that T-Mobile parent Deutsche Telekom might be interesting in buying Sprint to stave off pressuring resulting from the US price cutting frenzy. It doesn’t sound an altogether likely scenario to me. There’s the question of all the incompatible technologies – T-Mobile’s GSM, and Sprint’s CDMA and WiMax. Granted, T-Mobile would get some more customers, but Sprint it losing those at a rate of knots and would land itself in a technological and regulatory minefield.

The other rumour, courtesy of Seeking Alpha is that Sprint has hired Morgan Stanley with a view to spinning off Nextel, with an announcement due shortly. While this would seem equally daft at first glance – Sprint would lose all the investment it put into Nextel not long after acquiring it – there could be some sense here. After the massive writedown Nextel generated in the last set of Sprint’s results, why not admit it didn’t work out, give up trying to merge the two companies and their networks and just focus on CDMA and WiMax?