2 Problems That Could Sink Sprint's Potential T-Mobile Deal

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Rounding out what's been an active year in the telecom space, it appears the resurgent Sprint Nextel is in hot pursuit of T-Mobile .

Of late, a number of rumors have surfaced that the number three and four players in the U.S. telecom space are thinking of joining forces. For both Sprint Nextel and T-Mobile the deal makes plenty of sense. However, there are also several key hangups that could keep this deal from becoming a reality.

Sprint to T-Mobile: Let's make a deal
From 30,000 feet, two key hangups remains that could scuttle Sprint's bid to buy T-Mobile.

The first is financing. Plucking T-Mobile from the secondary markets certainly wouldn't come cheap for Sprint -- T-Mobile's current market capitalization is well over $20 billion. However, it appears that with the help of Japanese parent company Softbank, Sprint Nextel could muster the cash for the merger.

More importantly perhaps are the competitive concerns. As observers of the telecom space have seen, U.S. regulators are certainly inclined to maintain a competitive marketplace. In the video below, tech and telecom analyst Andrew Tonner examines this possible deal and how investors should look at this emerging telecom storyline.

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The article 2 Problems That Could Sink Sprint's Potential T-Mobile Deal originally appeared on Fool.com.

Fool contributor Andrew Tonner has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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