Worried about Sprint and T-Mobile merging? Sources tell the New York Post you shouldn’t be. According to them, the deal is “dead”. The FCC, who are outspoken about wanting four major US carriers, are said to be dead set against the merger.
The demand for spectrum from mobile service providers is at an all-time high, and only promises to increase. To satisfy the wants of consumers and carriers alike, the FCC has decided to take some spectrum earmarked for TV and auction it to carriers. In addition to the added spectrum, the FCC may implement a few rules about purchases for the upcoming auction that could signal their intent to thwart a Sprint/T-Mobile merger.
The proposed merger between Sprint and T-Mobile is an interesting Catch 22, according to analysts from New Street Research. Both carriers acknowledge they can’t compete with the likes of Verizon and AT&T separately, as their buying power for spectrum is just overwhelming. Together, T-Mobile and Sprint would still represent the number three carrier in the US, but the FCC is likely reluctant to let it happen.
The Sprint/T-Mobile merger has a lot of interesting nuance. A merger between major US carriers has been attempted before to no success, but the two carriers in question now are less “major”. The FCC is notoriously resistant to having three carriers, but is keeping an “open mind” this time. As for AT&T, they don’t think a Sprint merger with T-Mobile is even possible.
If you are rooting against the proposed Sprint and T-Mobile merger, it could be time to give up the good fight. Though many (the FCC included) would prefer the two stay separate, recent comments made by a T-Mobile executive hint that their joining forces is inevitable. The comments not only attempt to soften opinion on the merger, but suggest it’s going to happen.
It seems Sprint and T-Mobile’s proposed merger might be on hold, if not dead in the water. The Wall Street Journal is reporting that Sprint has cooled their heels on an aggressive buyout of T-Mobile, but it has little to do with the asking price. It has everything to do with regulatory bodies, though.
The Sprint/T-Mobile acquisition has a few nuances that make it attractive. According to T-Mobile CEO John Legere, it helps challenge Verizon and AT&T’s ability to acquire spectrum at auction by creating a third carrier big enough to challenge them. Verizon is now saying that if all the spectrum were considered equally, Sprint would be the majority spectrum holder.
Sprint’s proposed merger with T-Mobile may be reaching a fork in the road. Today we learn that the original bid Sprint was said to put forth for T-Mobile may need to be quite a bit larger. Conflicting reports suggest Sprint is either mulling their decision or close to getting financial backing, but one thing is certain: it still needs FCC and DOJ approval.
The proposed merger between T-Mobile and Sprint has one underlying theme: the FCC. The FCC, and by virtue of them the Department of Justice, have not been fond of anything less than four major carriers in the past. When AT&T attempted to purchase T-Mobile, it was the FCC and DOJ that took issue, and eventually stopped the acquisition. The same fate may be falling on Sprint and T-Mobile.