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Mobilizing the Business and Business of Mobile

Merger Rumors abound in Mobile Indutry

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With the economy slowly on the mend and the industry struggling with bandwidth, there is a merger mania going on in the mobile industry. Orange & T-Mobile over in UK have kicked things off and Sprint-Nextel followed it by acquiring the Virgin Mobile MVNO that operates on Sprint’s network. In addition, Bharti Airtell merger with MTN was stopped by Indian Government. There are more rumors which are making the investment bankers salivate. So what are they pushing?

First up is the perrenial favorite, Microsoft & RIM merger. Henry Blodget, CEO of Business Insider, thinks that Microsoft should buy RIM even though it might be expensive. On paper, this match is made in heaven with Microsoft’s strong engineering, deep pockets and large, loyal commercial customer base and RIM’s strength in enterprise email and hardware. This has been talked about for two years or more now but Microsoft has indicated that they are not interested. It remains to be seen how long it takes the talking heads and the investment types to convince MS otherwise.

This next one is intriguing and if it comes to fruition, this could shake the worldwide mobile industry up and at the same time give some joy to its competitors. There are rumors coming out of UK over the weekend that Vodafone might be considering merging with Verizon Communication so that it can get some benefits from its investment in their joint venture Verizon Wireless. Now, if this were to happen, it could be big news as two of the most popular wireless brands would merge and  can become truly a worldwide behemoth. However, there are dangers in this for both companies as the integration could take their focus away from growing and fighting off the competition. From timing perspective, this might be a now or never moment. Given that the industry is slowing and worldwide economy is not expected to expand until after Q3 of 2010, it might be tempting to roll the dice. However, there are significant hurdles to this deal as regulators in Europe, Asia and US will have to approve the deal which alone could take up well over a year. In the meantime, the two companies must keeping moving forward. Vodafone needs to continue to focus on growth in Western Europe and India while Verizon needs to build out its LTE network and not give up ground to AT&T. If the two companies can pull this off with any form of succcess, it would be a significant coup and feather in the cap of the leadership team. But, all this is conjecture until the deal is announced.

Finally, this deal seems to be equally long-shot. Deutche Telecom, is considering acquiring Sprint-Nextel and merging it with its T-Mobile Unit. While regulators should not have hard time approving it, the merger process would be insane with Sprint still trying to clean up  after its Nextel acquisition. In addition, Sprint needs to decide what to do with its Clearwire investment.

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Written by dvdand

October 12, 2009 at 6:00 am

One Response

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  1. Hello from Russia!
    Can I quote a post in your blog with the link to you?

    Polprav

    October 22, 2009 at 3:46 pm


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