Carriers
T-Mobile considering Sprint purchase
September 15, 2009 | by Andrew Kameka
Sprint, T-Mobile
Anyone who had doubts about how serious T-Mobile parent company Deutsche Telekom is about becoming a more powerful carrier may want to listen to this little news item: DT wants to buy Sprint. The Telegraph reports that Deutsche Telekom is considering a bid to buy Sprint that would value the company at $10.6 billion (note: that’s the potential value of Sprint, not how much cash DT would have to pay).
This is not a new rumor. In fact, phone companies are often said to be considering buying and merging with another to better combat rivals. However, we saw with the recent link between Orange UK and T-Mobile UK that these aren’t idle possibilities.
What would this mean for T-Mobile and Sprint customers? That’s unclear at the moment. The T-Mobile/Orange joint venture has so far been described mainly as a behind the scenes link rather than a full merger of two companies. Both companies retain their brands but share some operational functions.
Sprint and T-Mobile are likely to employ a similar set-up stateside. T-Mobile USA uses GSM while Sprint uses CDMA and is in process of going to a new data standard in WiMax. It’s questionable that either would abandon its plans for billions of dollars in data network upgrades, so a T-Mobile/Sprint merger would spark some interesting questions.
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This is very bad for consumers if allowed to proceed. Hopefully, the FCC and/or the DOJ under the new Obama Administration which is more concerned with regulating monopolies than George W. Bush's Administration was (Bush ignored antitrust and let big companies do whatever they wanted even when consumers were harmed thinking the market will just sort itself out) Obama is more pro-competition, pro-innovation, pro-consumer and hopefully his Administration will block this. There have already been two enquiries one by the House last year dubbed the iPhone hearing with Massachusetts Democrat Ed Markey discussing the pros and cons of exclusivity deals wireless phone carriers strike and how this helps or hurts consumers and another in the Senate earlier this year with John Kerry. More consolidation can only lead to less consumer choice, and less competition. The wireless market is already restricted enough we need more competition not less. I hope if they try to actually do this deal it is rejected by Washington for anti-trust concerns.
I think Annonymous_man Is an idiot.
Agreed. This would be a good thing for Sprint and T-Mobile customers… that's what the government should concern itself with.
Not going to happen.PERIOD
As an "undisclosed source"…….This is a complete rumor and a ploy to move up the shares of Sprint/Nextel. Pehaps the likely merger would be Verizon and Sprint and T-Mobile and at&t. Just to give you all something to think about.
James……Just to give you all something to think about. What are you talking about and how do you come to this conclusion? Verizon and Alltel worked because they were on the same system, CDMA, sprint/nextel didn't work, it destroyed their company, look at stock prices and massive customer losses. Perhaps, as you said above, it would be nice to hear more from you about whether you know what you're talking about or if you're just stating something as an unaware person???? Matt
All you guys are wrong and you all suck…!!! Metro PCS rules!!!
I think this would be a bad thing. I've had both Sprint and T-Mobile services, not to mention I was a Sprint employee and Sprint's customer service just sucks. They invest millions in projects that never come to fruition and are just too big to get things done expediently. Sprint's stock prices stay low because of these 2 issues and more people run away from Sprint because of their terrible customer service. Just take a look at the news postings here for Sprint, they're almost all bad news. Sprint is doing good to stay in the game at all. The only good thing that could come out of this is Sprint's fiber network going to T-Mobile along with their Local and Long Distance businesses.
Thanks everyone for the great insight and post here. Its great when everyone can share ideas and expirence with others and when it makes a differnce as well. I will be making a contribution here as well. Thanks
The carrier game is all about scale. Verizon and AT&T have it, Sprint and T-Mobile do not. AT&T and Verizon spread their fixed and variable costs over a base of about 75-80 million subs each. T-Mobile about 33 million and Sprint about 42 million. That's a huge difference especially in the fixed costs – all big 4 carriers have the same network scale and cost structure for fixed expense. Combining the two would save a couple of billion in EBITDA right out of the gate. Instead of T-Mobile spending $900 million in advertising and Sprint $1.5 billion, you have one merged company spending $1.5 billion. You just saved about a billion and you're just getting started. Then you can eliminate duplicate stores and overhead, support offices, call centers (and because T-Mobile runs the show – Care centers would be US based). Now for network: data whether on a GSM or CDMA network is routed over…CDMA. I don't care what a GSM carrier wants to call it. It is still a version of CDMA. T-Mobile and Sprint combined could route voice calls over the GSM network and data over the CDMA. It would require an easy handset/device modification. Wireless customers upgrade their handsets every two years if not sooner – to the tune of a 2 to 1 ratio of upgrades to new (except piece of crap carriers like metro and cricket). Within 3 years, the entire customer base of your most revenue rich customers would be migrated over to the new handsets. Any customers who do not want a new handset can go on business as usual – they are low revenue/low usage customers so leave them be. The iDen network could be sold off separately to someone who wants a prepaid or all you can eat format for a hefty sum (and they are out there). That cash goes towards the migration of the two remaining networks. As for the FCC and DOJ, who do you think allowed Verizon and AT&T to get so big in the first place though a series of acquisitions and mergers? They can hardly go to T-Mobile and Sprint and say, sorry – we won't let you have the same scale – you guys get to go out of business. We have plenty of competition in the U.S. – So much in fact, that the wireless game is nothing buy a switchers game. And don't forget that a smaller number of large carriers gets technology moving in the same direction at a much higher speed. It should happen. Whether it will or not remains to be seen. I don't see how they survive on their own.
Financialy its probably true, but I have to tell ya that Sprint has excellent customer service to the business market. And Verizon and AT&T just stink on the business side. We're pretty small (30 phones) but we get excellent service from Sprint. Which is good because the stores/resellers seem to be closing down one by one. T-Mo has decent customer service on the consumer side. AT&T was just a disaster. I won't trust either Verizon or AT&T until they get billing and servicing accounts fixed. The problem I had with Verizon was getting a bill cleared up that was supposed to be a 'free' test. It literally took 4 months to get them to finalize and clear up the billing. Something like that is 1 call with T-Mobile. But just be warned if you try to take a number between regular and pre-paid on T-Mo, that's three calls right there. They don't seem to be the same company.
All I know is every since this merger, which I did have to upgrade my BB, I’ve had sound issues. Every once and a while ‘All’ my sounds such as ringtone, SMS/MMS messages, calendar, task, etc. Constantly stops working. I have to remove my battery to recover ‘All’ my sounds, which this never occurred as just a T-mobile customer. Apparently something’s not right or compatible. All was well before the merger.