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Almost two years to date since AT&T pulled its bid for T-Mobile USA, rival carrier Sprint is reportedly preparing its own offer to purchase the fourth largest carrier in the US.
That’s according to a The Wall Street Journal report which claims Sprint is currently looking into regulatory concerns that could be voiced if the third largest US carrier acquired the company which runs the fourth largest US carrier.
Sprint hasn’t yet decided whether to move ahead with a bid. Going forward despite regulators’ concerns would be highly risky. Any pursuit of a bid by Sprint could be aimed at testing antitrust officials’ reaction to a deal, and a bad reaction could put an end to the effort.
While Justice Department denied AT&T’s bid for T-Mobile in 2011 after a year long effort, it’s certainly possible a Sprint/T-Mobile merger could prove otherwise considering rival carriers AT&T and Verizon’s position in the market.
As the WSJ report notes, Verizon leads with 95 million postpaid subscribers and AT&T has 72 million subscribers, but such an acquisition would keep Sprint in a distant third place with just 53 million postpaid customers.
Both Sprint and Verizon have proved capable of adding competition in an an industry with so few key players. Sprint has long boasted its unlimited data offer for customers while T-Mobile famously reinvented the 2-year upgrade model with options soon adopted by the competition.
Unlike the proposed AT&T/T-Mobile acquisition bid two years ago, Sprint and T-Mobile operate with different technologies. The former company relies on CDMA technologies while the latter company is built on GSM.
Free Press President and CEO Craig Aaron made the following statement:
“The public doesn’t need fewer competitors and fewer choices — not when the wireless market already has solittle competition. As they did in blocking the merger between AT&T and T-Mobile, the FCC and Justice Department must carefully and closely scrutinize this deal and its impacts on consumers and their wallets. The public will get nothing good out of this deal.”
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Oh my, now THAT’S funny. With WHAT Sprint? Monopoly money? In a few quarters T-Mobile may be able acquire YOU, but you don’t have the ability to acquire T-Mobile. What a joke.
Sprint is actually primarily owned by SoftBank now (a major Japanese carrier) so I’m guessing they’d also have their financial backing to make such a bid.
Personally, I think nothing but good for the consumer has come of the blocking of the AT&T bid. I firmly believe had AT&T been allowed to gobble them up, none of what T-Mobile has done to change the American telecom industry for the better would have ever happened.
I’m personally quite dissatisfied with the value of major cell phone coverage here in the U.S. compared to what I’ve heard about and personally experienced abroad. These major carriers need to continue to compete, I think we’ve all seen fresh examples of the benefits of that when AT&T was denied. If Sprint is allowed to gobble up T-Mobile I will be utterly disgusted.
Correction, I meant to say I’m personally quite dissatisfied with the value of major cell phone SERVICE here the U.S. You guys really need to use a commenting system that allows edits.
With the way things are going, I’d be surprised if it weren’t T-Mobile who buys Sprint.
I certainly hope not!!!
Is it April 1st already? I am pretty sure that I pee’d myself a little bit reading this blog posting.
If Sprint has the financial ability to make a purchase of T-Mobile then maybe they should focus on IMPROVING the crappy service they offer to 90% of their customers.
I’m sorry but I am pretty sure that Dan Hessy and Sprint have the reverse Midas Touch, all they touch turns to ****.
They are the company that chose to adopt Wi-Max rather than LTE and then after a half hearted roll out they changed their mind and decided they would do the same as everyone else and use LTE.
They are the company that had pitiful service in 10 years ago and still have the same abysmal quality of service in 99% of the country that they had back then. They haven’t improved their network.
They make a big deal about offering unlimited 4G Data but you can offer unlimited Data all you want when almost all your customers either cannot get Voice let alone 2G, 3G and the LTE service is almost nowhere.
Though of course we will get the twats that will says “Sprint has wonderful service” they don’t realize that they are in that tiny fraction of the USA that does.
This is all theory on their part though! T-Mobile has gone further to improve their network, their customer service since the AT&T takeover was aborted after Sprint threw the Teddy bear out of the Pram and went crying that it would hurt them. Now it looks like it could equally be said that they were more upset because they were looking at a similar purchase of the same company but AT&T had a better offer on the table so they stomped their feet all the way to the FCC.
No, please God no.
Sprint is going to end up as WorldCom did. In fact, Sprint and WorldCom were going to merge, which was announced in 1999. In 2000, the merger was barred by the feds.
I used to work for Sprint back in the day of Sprint ION. That was one cool idea – the first commercially launched VoIP/VoATM service for small business and residential customers. The project ended in a spectacular bust, with Sprint losing billions of dollars. They spent about $100,000 per residential customer in capital expenditures, and ended up killing the program in 2001, with only about 3500 customers being recruited. Sprint had spent close to $5 billion on that project when they killed it.
Their cellular business has always been a disaster, even back 12 years ago when I worked for them, it was one of the worst cell phone services – Sprint PCS. They were one of the biggest long-distance providers in the US, but that business started collapsing in 2000, and by now there’s almost no profit left to be made in long distance. I remember in 2003 Sprint was still trying to charge 20 cents per minute for long distance calls within the US when others were already charging pennies per minute. Sprint coined the “pin-drop” moniker to try to bamboozle their customers into paying many more times for their long-distance calls than the competitors charged. Sprint knew back then that they were in trouble. Even though they are the ILEC in some areas, where they own the wires in the ground and are still making some money on DS1, DS3, PRIs, etc., this field is quite a bit more competitive now than it was a decade ago. Therefore, the revenue is slowing down and profitability is collapsing from that business as well.
Don’t forget the Wi-Max fiasco with Sprint heavily investing in Clearwire and then acquiring Clear to become Sprint’s 4G technology. All of the money spent on Clearwire/Clear was wasted as well.
Sprint never had great engineers working for them. Sprint has always had huge aspirations, and could borrow billions for all these nebulous ideas, but none of the projects amounted to anything that Sprint could draw a profit from. Verizon is run by geniuses compared to Sprint’s management.
So, this acquisition of T-Mobile by Sprint is one disaster company trying to broaden its market share by buying another underwhelming company, not to mention that the two companies run on incompatible technologies – CDMA vs GSM. Maybe Sprint wants to buy T-Mobile for their LTE deployment because Sprint is really behind on 4G due to the Wi-Max detour they took for over 5 years. Perhaps they want T-Mobile’s frequencies and/or towers. In any case, Sprint is up to its neck in debt, which keeps mounting with Sprint making the same stupid operational blunders time and again. They don’t have money to buy T-Mobile, but they are going to finance this deal by assuming even more debt on their books.
WorldCom was doing exactly the same thing until it went bust in 2002, and this is exactly where Sprint is heading. Next thing we may hear is that Sprint’s executives are on trial – you never know. Perhaps Sprint should shut down their customer-facing business altogether, and be a wholesale reseller for various MVNOs and CLECs.