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Tickers in this Article: S, DT, T, VZ, VOD
It's easy to get caught up in the euphoria of a big merger - especially one as tantalizing as the speculation of marriage between Deutsche Telekom (NYSE:DT) and Sprint Nextel (NYSE:S). But I'm not buying it.

Taking On the Big Dogs
Deutsche Telekom, the German owner of U.S. wireless operator T-Mobile, is considering a bid for rival Sprint Nextel, according to the UK's Telegraph paper. Together, industry No.3 Sprint and No.4 T-Mobile would create a much larger number three player to compete with top ranking AT&T (NYSE:T) and No.2 Verizon Wireless, a joint venture from Verizon (NYSE:VZ) and Vodafone ( NYSE:VOD). IN PICTURES: Eight Ways To Survive A Market Downturn

Of course, rumors of the deal might just juice Sprint's share price and spell a short-term trading opportunity. Sprint shares jumped 11% on Monday. But long-term investors, please ask yourselves: should Deutsche Telekom be paying for what is still a weak business and the challenge of thorny integration issues? I'm not convinced the merger makes good sense. (For related reading, check out Trade Takeover Stocks Wither Merger Arbitrage.)

Sprint's business is messy. Subscriber numbers continue to fall at an alarming rate. More than 250,000 wireless customers dropped their Sprint accounts in the latest quarter. At the same time, the German telcom will have to assume a whopping $19.6 billion of debt that's weighing down on Sprint's balance sheet. If it chooses to do a deal with Sprint, Deutsche Telekom will have a big clean up job ahead of it.

Fuel to the Fire
If that weren't enough to worry about, Sprint and T-Mobile run their businesses on two very different network technologies. Sprint uses CDMA for its cellular network and iDEN for its Nextel walkie-talkie system. T-Mobile, on the other hand, uses GSM, the system of choice for most wireless carriers.

Meanwhile, Sprint has bet its future on WiMax network technology, while T-Mobile has chosen LTE for its next generation systems. Judging by the two companies' wildly different approaches to technology, wireless network integration will be, at best, slow and very costly. (For more, check out Dial Up Choice Telecom Stocks.)

Benefits of the Merger
A merger will likely distract both Deutsche Telekom and Sprint and open the door for competitors to sneak in while they're working out all the kinks. What's more, any deal between big players could face stringent regulatory scrutiny. AT&T and Verizon must be rubbing their hands in glee at the thought of the integration hurdles facing the merger.

The Bottom Line
To be fair, Deutsche Telekom would be getting the shares while they are down. They have fallen about 50% since June. There is always the possibility that Deutsche Telekom may be able to fix Sprint's problems. Even so, a turnaround will be a tough slog, even under the guidance of a new owner. Deutsche Telekom might see merit in the deal, but investors should be a bit more skeptical.

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