Sprint Nextel Mulls Breakup: Report

"Any entity trying to acquire Sprint would need to deal with a number of complex issues around iDEN re-banding and integration, internal customer service hurdles, brand positioning (and continued restructuring), and other operating challenges that may further dilute Sprint's cash flow over the next 1 to 2 years," he said. "Meanwhile, companies currently not in the wireless sector have an option to build a cheaper and better-positioned 4G network platform from the ground-up."

Rumors of a Sprint buyout first surfaced in March after a CNBC contributor said Sprint hired Morgan Stanley to explore potential deals and takeovers, although both Sprint and Morgan Stanley declined to comment at the time.

Sprint has struggled with high customer attrition, which the company has blamed on poor customer service. During its fourth-quarter earnings report, Sprint said that the number of wireless subscribers dropped by 108,000 in the quarter due to declines in post-paid iDEN users and prepaid Boost mobile users. Total post-paid subscribers, a favorite metric among analysts, declined by 683,000.

"We are taking the customer defection issue very seriously, and we're addressing it," said Sprint CEO Dan Hesse during the company's fourth-quarter conference call. "Because we have not provided the right experience, customers are leaving us."

Sprint will deliver first-quarter results on May 12, with analysts expecting a profit of 2 cents a share on revenue of $9.40 billion, according to Thomson Reuters. However, net subscriber adds (or declines) will undoubtedly receive more attention from analysts and Deutsche Telekom.