Sprint reportedly mulling T-Mobile bid
Sprint Corp. is researching the possibility of merging with T-Mobile USA. SoftBank CEO Masayoshi Son, whose company owns more than 80 percent of Sprint, is pushing for the deal, according to the Wall Street Journal (available to subscribers only).
Verizon and AT&T dwarf both Sprint and T-Mobile in terms of subscribers. Combined, Sprint and T-Mobile would have about 54 million postpaid subscribers - still short of either AT&T 72 million or Verizon's 95 million subscriber base.
This comes two years after T-Mobile's planned merger with AT&T failed. The Justice Department filed opposition to AT&T's proposed acquisition of T-Mobile, citing anti-trust concerns.
Sprint hasn't decided whether to move ahead with a bid, according to the report - they're gunshy about crossing federal regulators, but executives from both Sprint and T-Mobile have argued in favor of the merger, which they say would give them the scale needed to compete more effectively with their bigger rivals.
Sprint's right to have anti-trust concerns. Part of federal regulators' concerns is that a merger may hurt competition for consumers which helps keep prices in check. To that end, a new reinvigorated T-Mobile has spent much of this year shaking up the US wireless market by eliminating cell phone subsidies and long-term contracts, simplifying its rate plans and offering deals like free data for 4G LTE-equipped iPads. In November the company indicated that it has added a million subscribers to its rolls so far in 2013.
The 4G LTE wars between the four major carriers is continuing to heat up: Verizon boasts that it has the most robust coverage of any of the nationwide carriers, while AT&T says that its nationwide 4G LTE network is the most reliable. Sprint is playing catchup, and T-Mobile has spent much of the year upgrading its own network with improved 4G LTE support.
Source: Wall Street Journal
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