T-Mobile CEO sees more challenges for Sprint
PARIS (Reuters) - The head of Germany's T-Mobile said wireless phone group Sprint Nextel (S.N) will face more challenges on its road to recovery but declined to say whether it would take the chance to buy its embattled U.S. rival.
"The Sprint business has not been a healthy business for the past years and there is still some time before they can prove the business is healthy," T-Mobile Chief Executive Hamid Akhavan told the Reuters Technology, Media and Telecoms Summit in Paris.
Sprint has been rumored as a possible acquisition target for T-Mobile parent Deutsche Telekom (DTEGn.DE), but the German company has declined to comment, saying it was pursuing mobile purchases in regions where it was active and adjacent markets.
"It's clear that everyone has looked at Sprint at some point...just to discover what is going on with that company," Akhavan said, adding he would not comment on anything related to Deutsche Telekom and Sprint.
Akhavan said his views on Sprint were partly based on his experience of working in the U.S. telecoms industry before joining Deutsche Telekom in 2001.
Sprint, which lost a million customers in the first quarter of 2008, announced a huge goodwill writeoff in February.
Its main problem has been subscriber losses amid customer service and network problems. Nextel's Integrated Digital Enhanced Network (iDen) is incompatible with Sprint's CDMA network.
"There is still quite a bit of technical challenge left in that business...it is not slam dunk that they have a road map to recovery," Akhavan said in light of Nextel's iDen network.
"I am guessing there are about 10 million iDen customers, these are high value customers,...most likely small- and medium-sized businesses where dependency on push to talk services is very high."
Nextel's iDEN combines radio and cellular telephone technology for push to talk services.
"It is difficult to transition these customers to a new technology and they may not decide to stay with Sprint," Akhavan said.
"The other companies including T-Mobile are not sitting on the sidelines saying let them have a nice transition, we have been feeding on these guys...every customer we lose to them we get three in return."
One of the main obstacles analysts have pointed out in regard to speculation Deutsche Telekom may buy Sprint is the network problems Sprint faces combined with the two different networks T-Mobile operates.
Deutsche Telekom's T-Mobile USA uses mobile technology known as GSM and has begun a roll out of its new UMTS technology.
(For summit blog: summitnotebook.reuters.com/)
(Editing by James Regan)
