Could AT&T be looking to buy Leap Wireless?

This sounds like just a rumor for right now, but the word late yesterday was that AT&T might be considering an acquisition of Leap Wireless. That’s really it, though. It comes from The Wall Street Journal’s “Heart on the Street” column, and the only evidence is that both companies canceled appearances at investor conferences. Correlation does not imply causation, though, and there are plenty of reasons why such an transaction does not make sense.

The most obvious is the network technology. AT&T uses GSM, while Leap Wireless uses CDMA. The perils of operating two separate network technologies was illustrated by the Sprint-Nextel merger. At least in that case, it caused significant problems. Sprint still hasn’t recovered.

Chances are this rumor will die out pretty quickly. While it wouldn’t be surprising to see Leap merge with another wireless operator sometime this year, AT&T probably isn’t the destination. Unless both companies have a plan for how to bridge the technological separation, such a merger could be more trouble than it is worth.

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