"I think right now it's clear that Sprint and T-Mobile are having an increasingly difficult time competing in the current environment, and there's really no easy solution," analyst Michael Nelson at Soleil Securities told the Kansas City, Mo., Sun.
"I think consolidation in the wireless industry is a necessary evil and makes a lot of sense," he said.
Both Sprint and Deutsche Telekom, which owns T-Mobile, declined to comment on the possible multibillion-dollar deal that could be a few weeks from surfacing.
British newspaper Sunday Telegraph reported Deutsche Telekom had asked bankers to assemble an offer to buy Sprint, the Sun reported Tuesday.
A deal would combine the third and fourth largest wireless carriers in the United States and "raise a lot of regulatory flags," Nelson said.
It could also be a nightmare from a technical point of view.
"From the Sprint side, you've got CDMA, WiMAX and iDEN, and then on the T-Mobile side you've got GSM in its 2G flavor and you've got the 3G version," Shosteck Group Chief Executive Officer Jane Zweig said.
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