Sprint, T-Mobile hop on merger-go-round

Sprint, T-Mobile hop on merger-go-round

Summary: A $50 billion deal is reportedly in place. A Sprint-T-Mobile merger would create a stronger No. 3, but risks abound.

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Sprint is reportedly nearing a final agreement to acquire T-Mobile in a deal valued at about $50 billion.

According to the Wall Street Journal, Sprint would pay T-Mobile shareholders about $40 a share. T-Mobile closed at $34.28 on Tuesday. The news comes shortly after AT&T announced plans to buy DirecTV.

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If the merger worked out---and regulator scrutiny will be intense---the combination of Sprint and T-Mobile would create a strong No. 3 to compete with Verizon and AT&T. The rub is that the merger would take away T-Mobile, which has been aggressive with its plans and given larger players a few headaches. T-Mobile is probably the biggest threat to Sprint's future

The risks and benefits break down like this:

  • Benefit: Sprint and T-Mobile would have more scale to improve coverage and compete with AT&T and Verizon.
  • Risk: Consumers would lose an option in carriers.
  • Benefit: Sprint and T-Mobile would be able to acquire more spectrum.
  • Risk: Sprint and T-Mobile have different networks and it's unclear the work and timeline involved to combine LTE, GSM and CDMA networks with a dash of WiMax thrown in.
  • Risk: Regulators may not approve a Sprint-T-Mobile deal. The Journal noted that Sprint would pay a $1 billion fee if regulators shot the merger down.

Topics: Networking, Mobility, Telcos

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13 comments
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  • coverage

    T-mobile's coverage gaps (especially 3g) are it's greatest weakness. Combined with Sprint, coverage would be much better. The big question, though, is whether Sprint would choose to keep T-Mobile's aggressive price structure in place, or world the company decode that, absent is low cost rival, it should adjust is pricing to match AT&T and Verizon. The latter would be a big loss to consumers.
    dsf3g
  • Sprint

    Many cell phone service providers offer various cell phones with different features to enable you to better choose the cell phone that best fits your needs. Sprint offers several types of these devices each with extras that you may be interested in.
    underseaglider
    • This is better...

      Work for yourself only for a couple of hours a night and can make up to $25K/mo. Best places are on street corners and inside casino bars in Las Vegas. Two women I knew are doing it and making a killing.
      80sGuy
  • they just better not

    touch my $30/month for 5GB LTE data deal
    theoilman
  • All the people who

    jumped from Sprint to T-mobile may jump right back off if this goes through. Sprint (at least among those I know) has a pretty shoddy reputation when it comes to customer service.
    luke mayson
    • Ha, that's putting it lightly!

      I was a sprint business customer for 14 years. Finally had enough of their "customer service" and switched all my phones away from them, paying big cancellation fees for the privilege. Verizon has been excellent, but far more costly. Sprint still hasn't got 4g in our area and I doubt they have the interest in doing so. Both AT&T (which I can't stand either) and Verizon do. T-Mobile has a fair 4g coverage, but not a blanket like the other two.
      ccs9623
  • I don't think I like this merger option either

    But it is better than merging with AT&T (or Verizon). Sprint needs to pick up T-Mobile's customer service and the better pricing.

    Of course what I really want is Verizon to drop their prices, since I have Verizon and they have the best coverage.
    grayknight
  • NOOOOOOOO!!!!!!!!!!!

    I would run faster than fast to any competing service.....Sprint is one of the worst companies I have ever dealt with.


    But the bottom line is this shouldn't be approved, we really need all 4 players.
    cmwade1977
  • The network incompatibility problems have already been solved.

    "Incompatible networks" is a dead argument.

    Most of Sprint's current handsets already support T-Mobile's network. Sprint is in the process of virtualizing all of their radios and putting them in data centers. When they're finished, one person could update the entire Sprint network to support any technology without even leaving the office. Sprint would need to add antennas at the base stations to support some T-Mobile frequencies, but that's trivial.

    It's almost as if Sprint's new network was designed from the start with absorbing T-Mobile as a prime consideration, they've been planning for this merger for the last three or four years, and now that they've got their Borg network nearly finished it's time to start assimilating.
    hungryjoe
  • No, no a thousand times "No"

    There is no excuse to allow this merger. There are no upsides for the public, only downsides from eliminating competition. We just lost US Cellular in the Chicago area and switched to T-Mobile because Sprint, AT&T, etc. all pretty much suck in terms of prices and customer service. Enough already. No good can come out of yet another merger of mobile phone companies.
    dl@...
  • Sprint better not Fk-up my service.

    I've been with T-Mobile for over a decade now and never like Sprint. My service, although not as strong indoors but proven to be more than adequate at times combined with the excellent customer service from T-Mobile made has me a long time loyal customer. All I can say is, if they merge, Sprint better not Fk this up for all of us; this goes for cell/data service, monthly plan costs, and above all - customer service.
    80sGuy
  • Another windfall for T-mobile

    They received 4 billion when the ATT merger fell through, perhaps another billion if/when this one in shot down by regulators.

    I like and use them, and will be hoping for the merger to be shot down. They can then invest the billion in further improvements to their network, and super deals for customers.
    onefussyone
  • Petition

    If there is a petition to the SEC against this merger, I will be the first to sign. Sprint has been nothing but a pain since I signed up nearly 10 years ago. My wife and I just jumped ship for T-mobile and it looks like they're reeling us back in. Join Sprint again? Screw that. I'll be taking my business elsewhere thank you. They've been promising 4G in Fresno for years now and its nearly mid way through 2014 and they still can't get their act together. We're the largest metropolitan area in the U.S. without Sprint LTE and there is no indication they will ever get it up and running.
    indianajoel