T-Mobile CFO floats Sprint merger boat: 'Not if, but when'

T-Mobile CFO floats Sprint merger boat: 'Not if, but when'

Summary: T-Mobile's CFO suggests the two together could carve out a "more competitive environment" for the U.S. cellular market. But after the failed AT&T-T-Mobile merger in 2011, would the U.S. government allow it?

TOPICS: Networking
(Image: T-Mobile)

T-Mobile is flirting with the idea of a Sprint marriage, as part of wider, long-term efforts to take on its major U.S. cellular network counterparts, AT&T and Verizon.

But whether or not Sprint would want to join in, considering its own merger situation, remains an unknown question that T-Mobile, the fourth largest U.S. cellular carrier, declined to discuss.

At the sidelines of the Goldman Sachs Communacopia investor conference in New York City, T-Mobile chief financial officer Braxton Carter told the Reuters news agency that he expected to see more mergers and greater consolidation in the U.S. cellular market, calling it the "logical ultimate combination."

Calling the move "not a question of if, but when," he hinted that it could be in Sprint's best interest — particularly if it gives the duopoly of AT&T and Verizon something to lose sleep over. 

Currently, Verizon and AT&T have more than one-third of the U.S. population each on its roster. Meanwhile, Sprint and T-Mobile's combined share comes in just shy of that.

Realistically, and logically — as Carter suggests — the two together could carve out a "more competitive environment." 

But will the U.S. government allow it?

It comes two years after U.S. regulators blocked the proposed sale of T-Mobile to AT&T for $39 billion. The U.S. Justice Department sued to block the sale, a case in which it ultimately won. The logic behind the decision that the four major carriers should remain to keep the cellular market competitive. 

But two years later, the U.S. regulators were more than happy to see U.K. network Vodafone sell its share of Verizon Wireless back to the first-place network by subscribers for a massive $130 billion.

Since the 2011 block on the A&T-T-Mobile merger, T-Mobile snapped up MetroPCS, while Sprint and Japanese cellular giant Softbank made a pitch to merge in their own right.  

Meanwhile, AT&T repeated earlier sentiments this week that it continues to gun for a European market, something the firm will most likely achieve by acquiring a network in the 28 member state bloc.

But that might not be as easy as the firm would like, amid proposals from EU Digital Agenda Commissioner Neelie Kroes to break down the barriers in the European roaming market and carve out a single market for the cellular sector.

Edited: at 3:00 p.m. ET: to correct T-Mobile as the fourth largest U.S. carrier, not the third. 

Topic: Networking

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  • Sprint is 3rd largest not fourth.

    Better get your facts correct T-Mobile is the smallest of the big 4 carries in the US. Sprint is the 3rd largest.
    • but it is

      the 4th liked by consumers
      • Yep

        I just left them for T-Mo.
        • The government should make sure that there are 4 national carriers

          There are lots of tiny countries with 4 mobile carriers. The United States is a huge mobile market that can easily support more than 4 carriers.

          It's only when one or two get too dominant, and try to squash the smaller ones, that it becomes a problem. The government should step in to make sure there are a minimum of 4 national carriers.
          • Wireless Carriers are an Oliogopoly Market

            There is a high fixed costs - that is why both T-Mobile and Sprint have trouble making a Profit. If they merge it would be competitive to the other two carriers and will help the industry.
    • are you sure?

      Even after the metro merger and the loss of so many contracts? I'm not sure the numbers are in yet and I could see them slipping to #4.
  • just don't get rid of

    my $30/month 5GB data plan
    • also

      get rid of that CDMA crap if you merge
  • CDMA ...

    If they did mrege, I agree with "theoilman" that they should ditch CDMA. GSM/LTE standards don't need to be fragmented. Maybe if Verizon was only significant CDMA carrier we could finally get rid of it. It would help handset manufacturers to not have to deal with it.
  • This would be a great pairing

    The combined company would be pretty cool.
  • The combined carrier would still be #3...

    Given that the merged Sprint / T-Mobile would still be smaller than either Verizon or AT&T, I suspect that they would be able to get regulatory approval. But that would be the endgame; I don't see the DOJ approving a merger of any of the three remaining carriers in the foreseeable future.
    • But they should

      if they don't one of the two will probably eventually shut down and there will be three anyway. That would be a big loss - it would be better if they are allowed to merge.