Sprint T-Mobile Merger, Sprint is mulling a potential bid for rival wireless carrier T-Mobile, according to a new report.
The report comes from The Wall Street Journal, citing “people familiar with the matter.” According the Journal, the company is “studying regulatory concerns” and it could be prepared to make an offer as soon as the first half of 2014.
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A Sprint/T-Mobile merger would pair the United States’s third and fourth largest carriers into an entity that could better compete against the two largest carriers, AT&T and Verizon. A Sprint/T-Mobile merger is something Sprint executives have sought for many years. Over the last year, in the wake of the failed AT&T/T-Mobile merger, executives from both companies have gone on record arguing that a merger should be allowed.
Even before the aborted AT&T/T-Mobile merger, Sprint has expressed interest in a partnership with T-Mobile. A source close to T-Mobile told Mashable, and other outlets have reported, that Sprint had discussed a soft-bid for T-Mobile in late 2010. After AT&T bid $39 billion on T-Mobile in early 2011, Sprint filed a federal lawsuit against both companies in an effort to stop the deal. Ultimately, the Department of Justice filed an antitrust lawsuit against the merger, forcing AT&T to pull of the deal.
Regulators were very clear that an AT&T/T-Mobile partnership “would substantially lessen competition for mobile wireless telecommunications services across the United States.” The question then becomes, would a Sprint/T-Mobile merger have that same impact?
The argument from Sprint and T-Mobile executives has been that the two companies should be able to merge because only then do they have a chance to compete against the behemoths that are AT&T and Verizon. Sprint and T-Mobile’s combined subscriber base is 53 million users. That’s substantial, until you consider that AT&T has nearly 110 million subscribers and Verizon has almost 120 million subscribers. In other words, a combined T-Mobile/Sprint is still only half the size of one of the other players.
It’s also possible that the climate over mergers could have changed in just two years. A November report from The Wall Street Journal noted that the Department of Justice’s approval of the American Airlines/U.S. Airways merger opened the door for a similar merger in the telecom space.