Mergers & acquisitions

Tough Road Ahead for Sprint/T-Mobile?

Ambitious SoftBank CEO Masayoshi Son could face a tough road ahead in convincing US regulators that a merger between Sprint and T-Mobile is in the best interest of American consumers.

The Wall Street Journal reports that the SoftBank Mobile Corp. CEO is due to meet with Federal Communications Commission (FCC) chairman Tom Wheeler about the prospects of a merger. A wide range of topics is expected to be covered at the meeting. (See SoftBank's Son Keeps Sprint on Short Leash.)

The latest meeting comes after the WSJ reported that Son and Sprint Corp. (NYSE: S) CEO Dan Hesse were met with skepticism about the merger by officials at the Antitrust Division of the U.S. Department of Justice . (See Euronews: DT, SoftBank Back in Sprint Merger Talks.)

Son and other supporters of the merger say that the combination of Sprint and T-Mobile will allow the operators to scale to compete with AT&T Inc. (NYSE: T) and Verizon Wireless . (See Is SoftBank Ready to Reunite With Legere?.)

The flip side being argued by unions and others is that creating three massive wireless carriers in the US could further restrict consumer choice.

What's your take? Let us know on the message board below.

— Dan Jones, Mobile Editor, Light Reading

COMMENTS Add Comment
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DanJones 2/5/2014 | 5:25:46 PM
Re: Less is more ? I can't imagine any of the CTOs of either company looking forward to tying that mess of frequencies together into a cohesive whole.
Sarah Thomas 2/5/2014 | 5:06:43 PM
Re: Less is more ? T-Mobile has shown how a smaller carrier can innovate despites its size disadvantage. Sprint could certainly do the same, it just hasn't been able to yet because of all the network issues it has to focus on first.
DanJones 2/5/2014 | 1:34:02 PM
Re: Not sure what could save Sprint from itself... It would definitely be a huge challenge.
Pete_S4 2/5/2014 | 1:30:35 PM
Not sure what could save Sprint from itself... I've been a customer of, supplier to, and competitor of Sprint over the last 15+ years.  I've worked with its demoralized employees professionally.  I've watched it fail to integrate companies it bought, run its network on the ragged edge, throw financial / technical Hail Mary's, and fail to compete on anything other than price / "unlimited" data plans.  

T-Mobile at least seems to be using its limited resources with some efficiency and trying to bring some innovation to the industry's pricing model.  Though I'm not quite sure how different a two year payment plan with service is all that different than a two year contact....

Maybe Softbank will be the outside influence that finally saves Sprint from itself, but I fear for T-Mobile if they are ever assimilated by Sprint.  It might sound good on paper, but there'd be 4 organizations and corporate cultures between T-Mobile, Sprint, Softbank, and Clearwire to integrate.  Not mention legacy GSM, UMTS, CDMA, and WiMax customers/networks to support while moving to an LTE future.  These rarely go as planned.

balsam 2/4/2014 | 4:59:49 PM
Less is more ? Will scale helps combined Sprint/TMobile entity to fight of AT&T, Verizon, what industry needs is to enabling innovation. This can be best achieved at size that T-Mobile and Sprint are today instead of a combined entity.  Sprint & TMobile have opportunities to innovate on technology, business models, how they charge users, their data services, OTT partnerships, to name a few. 
Mitch Wagner 2/4/2014 | 4:32:43 PM
Re: No way Sprint's response to this is that is that AT&T and Verizon need a company of similar size to compete with them, and that neither Sprint nor T-Mobile separately are big enough to do the job. 

It's not the crazies thing I've ever heard. (That would be Frank Sinatra singing the Rolling Stones.)
RitchBlasi 2/4/2014 | 2:57:35 PM
Three or Four???? I've always believed that fewer national mobile operators with the assets to deliver what everyone is promising using mobile is better than more.  We all know the growth in use will only continue, as will the need to carry more bandwidth intensive services.  This comes down to a quality issue.  I agree with what folks are saying that three carriers still constitute competition - and then you can add in all the MVNOs selling similar services for lower costs and the consumer will be fine.
Sarah Thomas 2/4/2014 | 1:52:51 PM
Re: No way Interesting ideas, pzernik. I would think merging just backhaul or certain systems would make it more confusing to consumers and from an integration perspective, but might have a better chance of getting approved. Unlikely though, IMO.
Sarah Thomas 2/4/2014 | 1:51:36 PM
Re: No way It is pretty funny how much all of them have to, at one time or another, backpedal on things they said before. Although I do think Legere has been careful what he says about Sprint, attacking it, but only for things that T-Mo could change (if given the opportunity).
DanJones 2/4/2014 | 12:45:21 PM
Re: No way Still comes down to the question: Would SoftBank  be allowed to buy both though? Really the same result as the two merging.
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