Braxton Carter, the chief financial officer for T-Mobile, has said that it's highly likely his firm will merge with larger US mobile rival Sprint. "It is not a question of if, it is a question of when," Carter said, Reuters reports. "To take a third-scale national player that has the scale benefits with the right business model …
Come feel the Sprint disease
How about Masayoshi Son fix that loser mentality at Sprint first. Sprint has coverage everywhere that works nowhere. Adding another telco's resources will just make them a bigger failure.
Maybe I'm the lucky minority, but I've had Sprint for almost 10 years and they've been fine. I live in an area where CDMA works much better than GSM, so I really only have a choice of Sprint or Verizon.
Sprint has been much more cost effective, and while they've been much slower to roll out 4G in my area than Verizon, they've been doing a lot of build-out recently. I'm now getting 4G connections in most of the backwoods area I live in.
Please do NOT let this happen. T-mobile(US) has already done wonderful things for the US cellular consumer. Sprint has been doing horrible things to the US cellular consumer.
This gives me sad feelings
I moved to T-Mobile from Sprint mostly because Sprint's network -- previously fine -- started to become spotty in my area.
I don't look forward to them buying T-Mobile and then continuing their practice of selling off towers and screwing up my connectivity again.
The biggest regulatory obstacle to this merger
is that 3 years ago it was Sprint arguing AT&T shouldn't be able to buy T-Mobile because that would reduce competition in the market place. Hard to seem them reversing that decision and not be run out of town on a rail for payola.
Re: The biggest regulatory obstacle to this merger
You make a good point, Tom. Those words may come back to haunt Sprint's new owners, even though they had no connection with Sprint at the time.
However, the fact that AT&T was already #2 at the time might make a big difference. A merger between #2 and #3 or #2 and #4 is gonna get a lot more regulatory scrutiny than one between #3 and #4. Especially where — as in the U.S. today — we are getting closer and closer to having a de facto duopoly (at least nationwide, though perhaps not in all regional markets), and even the resulting combined firm would still be only #3 in market share. Under all these circumstances, regulators might decide that this merger is in the interest of continued viable competition with #s 1 and #2.
(P.S. I wrote all that before learning that Masayoshi Son — whom I'd never heard of before — said the same thing in support of his proposed acquisition.)
What I don't get: CDMA vs. GSM
What Carter said about economies of scale, and the ability of a combined firm with greater resources to compete with the current #1 and #2 firms, all makes sense. Until one remembers that Sprint uses CDMA and T-Mobile uses GSM! How would the two networks be integrated, and how would the cost and difficulty of that integration not offset the superficial gains to be had from any merger?
I do not ask these questions merely rhetorically, to argue against the merger making economic sense. There may be a very good answer, and I would love to hear it!
But on the face of the situation I cannot see these two particular firms merging. It just doesn't make sense to me.
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