Bonehead merger averted: Sprint rethinks T-Mobile pursuit

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.

TOPICS: Mobility, Telcos

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

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  • Good headline

    Reminds me of when MS abandoned its attempt to buy out Yahoo (one of the better things Steve Ballmer did as MS-CEO was to put his ego on hold and abandon this truly misguided effort).

    I also think this development is good news for Sprint customers (of whom I'm one) as I strongly suspect that this particular merger would do for customer service what the Nextel merger did (which from the customers' point of view was a disaster). I don't know enough to say whether or not this is a good thing for T-Mobiles customers or employees.
    John L. Ries
    • Sprint/T-Mobile debacle

      I am a T-Mobile customer, and it would be a complete and total disaster to allow Sprint to buy T-Mobile. It is clear that Sprint has no idea how to be a competitive wireless carrier. They've demonstrated this through disastrous mergers and partnerships with Nextel and Clearwire, and banking on lackluster and unsustainable technologies with Wi-Max. They launched 4G LTE almost 2 years ahead of T-Mobile and have already fallen behind the 4th place carrier in that race. It's time to let Sprint live or die on their own. T-Mobile on the other hand is finally starting to gain success with their network and gaining customers. Let it play out.
      Marcus Paul
  • Did Sprint forget about the Nextel Merger Debacle?!

  • The Nextel Merger worked for what it was needed for.

    Sprint Got business customers, and cell towers, both of which were badly needed.
    • merger foolishness

      ...and the process destroyed Nextel, which was a good scrappy carrier with decent servcie and a terrific niche. Many of us still miss it.
  • Nice

    Its so nice post i really liked it thanks for sharing. Zynga Games Support
  • Sprint isn't being stupid this time around

    Sprint Learned its mistakes from Nextel! However, you have to Forget that and look at the network now!
    T-Mobile's Network is HSPA+ GSM 3G VOICE and 4G LTE/VoLTE
    Sprint's Network is CDMA 3G VOICE and 4G LTE/VoLTE

    That is not really a bad combination other then way to many Spectrum Bands

    Both Companies are ready to turn on VOLTE... Meaning ALL Network activity including voice will run on LTE... Sprint's CDMA will be slowly turned off after VOLTE is activated leaving sprint a 4G LTE/VOLTE Only network... No 3G Fall Back... TMOBILE can still use that fall back...

    This means a merger would only require, if wanted, to convert sprints CDMA to HSPA+ Or just deactivate it and call it a day!

    Also, DISH NETWORK has been wanting to enter and create its own Cellular Network.. SPRINT Says it can help... The PITCH To the FCC is to Merger Sprint & T-Mobile Networks... Divest what needs to be... Give up ANY Spectrum it can't or isnt allowed to use.. After that, They will DUAL BRAND the old SPRINT FOOTPRINT.... The New Combined Sprint/TMOBILE will use both networks, DISH NETWORK will become an MVNO Provider "4th Carrier" and use ALL of SPRINTS old FOOTPRINT... Or, They will COMBINE Both networks and DIVEST ALL Unused Regions Specifically to DISH NETWORK..

    The FCC may have questions and may be causing some concerns... but its a WIN WIN... FCC Still has 4 carriers... and SPRINT/TMOBILE can compete enough to drive AT&T and Verizon costs a little lower