Bonehead merger averted: Sprint rethinks T-Mobile pursuit

Summary:Sprint reportedly is regrouping on a potential offer for T-Mobile after regulators opposed the concept publicly. Given the integration headaches, regulators may have just saved Sprint from itself.

Sprint is rethinking its potential move to acquire T-Mobile after regulators were opposed to the concept.

According to the Wall Street Journal, the Justice Department and Federal Communications Commission viewed the combination of the No. 3 and No. 4 wireless carriers as a tough sell.

Sprint has to bulk up and T-Mobile would be the only avenue to really grow. More worrisome for Sprint is that T-Mobile is more aggressive today and moving up the customer satisfaction charts. Sprint's conundrum is to keep getting punched in the head from above and maybe even below.

Word that Sprint was going to pursue T-Mobile surfaced late last year. A deal would be valued at about $20 billion.

However, as I noted before there would be significant integration risks with Sprint and T-Mobile. A merger would create a hodge-podge of networks, a business that revolves around pre-paid consumers with lower credit quality and a joint brand that doesn't scream world domination.

Bottom line: Regulator opposition may save both Sprint and T-Mobile future headaches.

Topics: Mobility, Telcos


Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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