Would Google Buy Sprint?

from the and-what-would-they-do-with-it? dept

Last month, when Sprint's investors pressured former CEO Gary Forsee to resign, Derek Kerton's post here on Techdirt made some compelling points:
"The disconnect is that investors in Sprint are risk-averse, Blue-chip, dividend seekers. They invested in Sprint when it was a utility company. But Sprint's 'gambit' into WiMAX has taken them way out of the 'utility company' comfort zone -- and the reaction of the investors is as expected. With Xohm, Sprint's risk profile is looking more and more like a big tech firm, say Yahoo or Apple. Today's Sprint needs risk-seeking investors, not fixed-income seekers."
Could a big risk-seeking investor -- who surely sees an opportunity in "big tech" rather than as a "utility" play be coming along? That, at least, is the premise of a blog post from Rich Tehrani kicking off speculation that Google is sniffing around to buy Sprint -- a rumor perhaps accurately called "hare-brained" by Eric Savitz.

While I tend to lean towards Savitz's view of the likelihood of such a deal, there are some nuggets in there that could make this slightly more interesting. Obviously, Google has a tremendous interest in the mobile space these days, believing it's a key part of its continued growth. The company has made plenty of noise about its supposed intention to bid for the 700 MHz spectrum that's coming up for auction. On top of that, it's increasingly looking like Sprint's WiMax plans are in trouble. However, Sprint still controls a huge chunk of 2.5 GHz spectrum that is quite valuable (whether its used for WiMax or some other wireless broadband technology). It's not entirely ridiculous to think that Google has at least kicked the tires on a plan that would involve getting access to that spectrum. It seems like a stretch that Google would want to burden itself with all the additional legacy issues associated with Sprint, but that chunk of spectrum sure must look tempting to a company with billions of dollars on hand, just waiting to be spent.

Filed Under: rumors, wimax, wireless
Companies: google, sprint


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  1. identicon
    Alaric, 12 Nov 2007 @ 10:50am

    Google Makes money from ads-services

    Buying a telco and competing with wireless carriers who hold upwards of 75% of the wireless and indirectly a fairly high share of the wireline broadband market might not be the best way to promote ads, services etc.

    Google phone is a better road. Then again Google might be drunk with its success in the internet world and they may vastly miscalculate what it takes to run a successful telecom carrier.

    Its a very very different business that is identified by long-term investments, high up front capital and slow payback. Its a slow moving snail of an industry compared to web services. In other words, its as foreign to the google way of doing things as running a dairy business.

    And most importantly, its a business that is paid for by boring old voice services.

    If they buy sprint, i'd hope they'd be smart enough to reassess wimax. Basing your technology on the strength of Intel's PR department is a dubious way to do things.

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