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So last week we explored the virtues of Verizon acquiring Sprint Nextel. It would make some degree of sense, but in the long run it appears that Verizon can pick off a number of Sprint subscribers free of charge. Hence, they probably don’t have a ton of incentive to make the multi-billion dollar investment that would be required of this deal. However, today we’re hearing, via analysts from Merrill Lynch, that T-Mobile could be the most likely company to take over Sprint. The Lynch guys think that this could avert a price war among the top mobile carriers. Sprint might have instigated one last week when they announced an all-in unlimited plan.

“In such a price war scenario, we think T-Mobile would face the most pressure, and Deutshe Telecom would see the increased urgency to drive market repair,” according to the firm’s report.

Now, we’re talking Deutsche Telecom, the parent company to T-Mobile USA. They’re the world’s sixth largest phone company, so they’ve got some leverage here. Combine that with a weakened dollar, and you have rumors of a takeover emerging.

The question is, how would Deutsche deal with owning two incompatible networks in the U.S.? Well, three, actually, since Sprint Nextel also has the iDEN network. But that only speaks to Sprint’s own troubles in operating two different networks.

So no, I don’t see this happening at all. T-Mo is doing fine for themselves. They would gain more spectrum by taking over Sprint, but it would be spectrum incompatible with their current operation. This is why it’s seeming like Verizon or bust for Sprint.

[The Kansas City Star]

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