While AT&T ( T) and Verizon ( VZ) slug it out for first place, Sprint ( S) is vying against T-Mobile for the last place among the top four wireless telcos. Sprint was nearly undone by the Nextel merger, which took a toll on the company, its subscribers and its profits last year. This year, Sprint's recovery hopes are pinned largely on Palm's ( PALM) Pre, the hotly anticipated touchscreen smartphone. No. 4 player Deutsche Telekom's ( DT) T-Mobile USA has been the sector sleeper steadily gaining customers through inexpensive calling plans and a few fun phones. T-Mobile's modest success is due partly to Research In Motion's ( RIMM) popular BlackBerry phones. In addition to the BlackBerry Flip Pearl and the Curve, T-Mobile is expected to get another 3G addition to its lineup, sort of a sleeker version of the Curve and Bold. T-Mobile has also benefited from Google's ( GOOG) Android-powered HTC G1 phone. And, if reports are true, the second version of the phone, dubbed Magic, will land later this year. The other potential product hit for T-Mobile this year is the Samsung Memoir. This eight-megapixel camera is also a touchscreen phone that can surf the Web. T-Mobile is one of the fastest growing-business units of Deutsche Telekom's empire. For Sprint investors, the races with T-Mobile and even the Palm Pre are secondary to possible takeover prospects. Spain's mobile giant Telefonica ( TEL) is preparing to make a big impression in the U.S. As TheStreet.com reported Friday, Telefonica is looking to hire a publicity agent to handle its image in the U.S. and U.K.
The move signals Telefonica's interest in expanding its global footprint beyond Europe and Latin America. Sprint appears to be the prime buyout candidate as the company tries to regain its footing after a crushing 2008. Without a buyout, Sprint is left with a limited-term exclusivity agreement to sell the Palm Pre and its alarming customer defection rate. Sprint has 50 million subscribers and dropping. T-Mobile has 33 million customers, and that total is rising. Sprint shares rose 5% and Deutsche Telekom fell 2% at the close of trading Monday. At this rate, Sprint will need a merger and a blockbuster performance from the Pre to avoid losing more ground to T-Mobile.