Possible T-Mobile-Sprint merger could rival AT&T in subscribers

Posted:
in iPhone edited January 2014
Deutsche Telekom, the owners of T-Mobile in the U.S., are reportedly looking into acquiring competitor Sprint. Together, the two companies would have a customer base that rivals AT&T.



According to The Daily Telegraph, Detsche Telekom is prepping a multi-billion dollar offer for Sprint Nextel, which is the third-largest wireless carrier in America. Together, the two companies would have a combined customer base near AT&T's nearly 80 million subscribers.



Currently, AT&T is the second-largest wireless carrier in the U.S., behind only Verizon Wireless, which had an estimated 87.7 million subscribers as of July. While AT&T has lagged behind Verizon, the No. 2 company has been gaining ground, thanks, in part, to its exclusive deal for Apple's iPhone.



Sprint is estimated to have a market value of $10 billion. The formal bid from Deutsche Telekom is expected to be received within weeks.



The news comes as the international corporation also hopes to merge T-Mobile U.K. with Orange. Combined, those two British carriers would have 37 percent of the market with 28.4 million subscribers. That deal is reportedly centered on the possibility of gaining access to popular handsets, like the iPhone, by having a larger customer base for negotiation leverage.



The Telegraph notes that T-Mobile U.S. has struggled recently, with revenue falling and subscribers leaving for larger carriers that offer better coverage, like AT&T and Verizon, or smaller, regional carriers that cost less. But combined with Sprint, it would have a subscriber base of 78.2 million, just behind AT&T.



Such a merger would be difficult, as the two carriers operate on different style networks. AT&T and T-Mobile share a GSM network, while Sprint, like Verizon, operates primarily as a CDMA network. Deutsche Telekom has reportedly been eyeing Sprint for over a year, though "preparations" for the deal began within the last few months.



While still a long ways off, if at all possible, a T-Mobile-Sprint merger would change the landscape of U.S. wireless providers significantly. The iPhone's exclusive contract with AT&T is set to expire next year, which has led some to speculate that Apple's device could become available on a rival network. By and large, assumptions have suggested Apple would choose Verizon, the largest wireless provider in the U.S. But a combination of T-Mobile and Sprint would be nearly as large as AT&T, and perhaps a viable option for Apple to consider.
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Comments

  • Reply 1 of 100
    melgrossmelgross Posts: 31,647member
    I'll post what I posted in Macworld, which had this story earlier:



    "Well, this seems to be an idea fraught with problems!



    How ARE they going to deal with the network problem?



    Having both would be counterproductive, but switching Sprint over to GSM would cost tens of billions. It would cost less to move T-Mobile to CDMA, but why would they want to move away from the global standard?



    I could understand this if Sprint was moving to the 4G standard that both AT&T and Verizon are moving to, but they aren't.



    So what benefits will they derive?"
  • Reply 2 of 100
    Quote:
    Originally Posted by melgross View Post


    I'll post what I posted in Macworld, which had this story earlier:



    "Well, this seems to be an idea fraught with problems!



    How ARE they going to deal with the network problem?



    Having both would be counterproductive, but switching Sprint over to GSM would cost tens of billions. It would cost less to move T-Mobile to CDMA, but why would they want to move away from the global standard?



    I could understand this if Sprint was moving to the 4G standard that both AT&T and Verizon are moving to, but they aren't.



    So what benefits will they derive?"



    They wouldn't have any benefits other than the amount of customers. I went from sprint to t-mobile to At&t hopefully Verizon when the Iphone goes to their network. I hated Sprint they always and i mean always screwed my bill up, thus i went to t-mobile so for me personally sprint Sucks, t-mobile will SUck if the buy Sprint. and it will not have effect on AT&t with the iphone or Verizon because of the network. it would be a stupid merger and like you said it will cost sprint millions or billions of dollars to switch to GSM and im sure t-mobile will not switch to CDMA.
  • Reply 3 of 100
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by melgross View Post


    I'll post what I posted in Macworld, which had this story earlier:



    "Well, this seems to be an idea fraught with problems!



    How ARE they going to deal with the network problem?



    Having both would be counterproductive, but switching Sprint over to GSM would cost tens of billions. It would cost less to move T-Mobile to CDMA, but why would they want to move away from the global standard?



    I could understand this if Sprint was moving to the 4G standard that both AT&T and Verizon are moving to, but they aren't.



    So what benefits will they derive?"



    Legacy support. The two networks remain separate for some time. As they both move to 4G the entire CDMA system needs to be replaced anyway. The economies of scale would benefit the new larger company in advertising, accounting and customer support where they could eliminate the redundancies. As new customers come online they would likely be on the GSM side of the equation.
  • Reply 4 of 100
    Quote:
    Originally Posted by mstone View Post


    Legacy support. The two networks remain separate for some time. As they both move to 4G the entire CDMA system needs to be replaced anyway. The economies of scale would benefit the new larger company in advertising, accounting and customer support where they could eliminate the redundancies. As new customers come online they would likely be on the GSM side of the equation.



    The economies of scale come from price gouging.
  • Reply 5 of 100
    I'm sorry, no matter what people think, I just can't see Apple and Verizon working together. Verizon's obsession with crippling devices goes totally against what makes the iPhone great...
  • Reply 6 of 100
    The merger will look better for the bottom line. We're currently in a period of undervalued companies and those teetering near bankruptcy simply because of the economy.



    Keep in mind also that T-mobile would instantly have a large chunk of the Clearwire deal, opening T-mobile to WiMax. This would all make T-mo and Clearwire a more attractive company for Apple to deal with.
  • Reply 7 of 100
    Quote:
    Originally Posted by eh270 View Post


    I'm sorry, no matter what people think, I just can't see Apple and Verizon working together. Verizon's obsession with crippling devices goes totally against what makes the iPhone great...



    And Apple already has standing deals with T-mo in Germany.... this sounds better every time I hear about it.
  • Reply 8 of 100
    Quote:
    Originally Posted by melgross View Post


    How ARE they going to deal with the network problem?



    Whereas Sprint might downplay the importance of 4G, the new joint venture would be moving there, quickly.
  • Reply 9 of 100
    This is easily one of the dumbest things I've seen recently. Doesn't T-Mobile know about the fiasco that was the Sprint and Nextel merger? What, 3 years later, and their still having problems with that. Instead of spending money buying something, T-Mobile should just throw that money into the network and expand 3G like crazy. I remember already seeing an article that they plan on dumping a ton of money into T-Mobile USA for just that anyway.



    Joe
  • Reply 10 of 100
    This is a recipe for disaster. Remember what happened when Sprint bought Nextel.The incompatibility of CDMA and the IDEN networks made this deal a total disaster. Dan Hasse, Sprint CEO, said it clearly on The Charlie Rose show the other day, how they paid too much for it and the trouble of integrating both networks. Imagine another go at it this time Wimax with LTE ? Tmobile has a clear upgrade path to 4g with LTE . Sprint already on Wimax. It will cost billions and years for it to work and by that time its functioning, if TMobile ever gets it to work, it would have lost more money.
  • Reply 11 of 100
    Quote:
    Originally Posted by eh270 View Post


    I'm sorry, no matter what people think, I just can't see Apple and Verizon working together. Verizon's obsession with crippling devices goes totally against what makes the iPhone great...



    Agreed!



    I can understand people's frustration with AT&T, but I think we have to give them credit for making this deal with Apple. We're all a lot better off than if Verizon had their way. This is easy for me to say because I don't live in NY or SF, and I've had nothing but good experiences with my AT&T coverage. But I'm not going to be looking to change carriers if/when the iPhone becomes available elsewhere.
  • Reply 12 of 100
    Sprint never really recovered from purchasing Nextel and the two systems are still operated separately. They have never been integrated.



    To me, this idea sounds like a continuation of a disastrous merger of incompatible technologies. Think Sprint would have learned the first time.
  • Reply 13 of 100
    Q: What do you get when you combine two medium sized wireless carriers who continue to loose customers each month due to inadequate service, coverage, and lousy support?



    A: A large sized wireless carrier that will continue to loose customers each month due to inadequate service, coverage, and lousy support. Case in point: Sprint + Nextel = A bigger mess.
  • Reply 14 of 100
    Quote:
    Originally Posted by ghstmars View Post


    This is a recipe for disaster. Remember what happened when Sprint bought Nextel.The incompatibility of CDMA and the IDEN networks made this deal a total disaster. Dan Hasse, Sprint CEO, said it clearly on The Charlie Rose show the other day, how they paid too much for it and the trouble of integrating both networks. Imagine another go at it this time Wimax with LTE ? Tmobile has a clear upgrade path to 4g with LTE . Sprint already on Wimax. It will cost billions and years for it to work and by that time its functioning, if TMobile ever gets it to work, it would have lost more money.



    Aquisitions/mergers are the only way to grow these companies right now. They certainly aren't able to add more customers in any great numbers using traditional methods. This makes sense, especially because T-mo can buy undervalued Sprint now and spin it off later when the economy has recovered enough (if that's what makes sense at that time).
  • Reply 15 of 100
    Quote:
    Originally Posted by AppleInsider View Post


    While still a long ways off, if at all possible, a T-Mobile-Sprint merger would change the landscape of U.S. wireless providers significantly. The iPhone's exclusive contract with AT&T is set to expire next year, which has led some to speculate that Apple's device could become available on a rival network. By and large, assumptions have suggested Apple would choose Verizon, the largest wireless provider in the U.S. But a combination of T-Mobile and Sprint would be nearly as large as AT&T, and perhaps a viable option for Apple to consider.



    As a T-Mobile subscriber for 6 years, and to quote the most recent tv commercial for Pizza Hut, "JACKPOT"!



    I do wonder what technological route they a merger would provide... T-Mobile's GSM, Sprint's current method or this 4G everyone is talking about?
  • Reply 16 of 100
    gazoobeegazoobee Posts: 3,754member
    Quote:
    Originally Posted by eh270 View Post


    I'm sorry, no matter what people think, I just can't see Apple and Verizon working together. Verizon's obsession with crippling devices goes totally against what makes the iPhone great...



    No one except a few tech pundits and some disgruntled customers think Apple will go with Verizon. They had the chance to twice already and they didn't.



    It makes no sense for Apple to make a CDMA phone and the only way *any* American telcos will get a contract from Apple is to move to a more modern standard. It would make sense for Apple to do multiple carriers if multiple carriers are available on GSM or LTE. Those that don't move quick enough will fail and be bought out just as we see happening here.



    The poster above that said they will merge and move both companies forward to LTE has it right on the button. If AT&T doesn't move to LTE fast enough they could end up being left behind as well. Things could and probably should move fast on all of this since almost every "western" country except for the USA is already far ahead.



    CDMA is dead in the water and Sprint is just the first casualty. In Canada, there are three telcos in the oligopoly and the other two are more than halfway through a conversion to GSM that started the moment they saw the iPhone wasn't ever going to work on their networks. By late next year, my part of Canada will be almost completely GSM and moving towards LTE at lightning speed.



    Most of Europe is there already.
  • Reply 17 of 100
    and kills Consumer Options.



    There should be a required minimum 20 Telco carriers one can choose from, in any market, at any time, with a unified back-end to traffic across.
  • Reply 18 of 100
    ronnronn Posts: 328member
    T-Mobile has $70B in debt, Sprint has more than $20B in debt. A merger will ensure further debt. There's no way this could go through. And I haven't even mentioned the incompatible systems. Never!!
  • Reply 19 of 100
    melgrossmelgross Posts: 31,647member
    Quote:
    Originally Posted by mstone View Post


    Legacy support. The two networks remain separate for some time. As they both move to 4G the entire CDMA system needs to be replaced anyway. The economies of scale would benefit the new larger company in advertising, accounting and customer support where they could eliminate the redundancies. As new customers come online they would likely be on the GSM side of the equation.



    I don't really agree. Both companies are quickly losing customers.



    The normal situation where two losing companies merge is for one new losing company to be formed. Often, losses increase after such a merger.



    Sprint is moving to WiMax for 4G. T-Mobile? Who knows?



    WiMx isn't compatible with the other 4G services that AT&T and Verizon are moving to as I said already. So they will still be stuck with a non compatible system.



    There are no economies of scale here. They use two networks, and they will be doing that for years to come.



    That means that they get no synergy from the merger. Two technical departments, two equipment technology lines from their suppliers. Two support staffs, etc.



    What an incredible waste of money!



    It costs large amounts of money to integrate two large companies even when their technologies are the same. Just figuring out who should stay, and who should go, what management lines are going to take over from which company, how the culture clash will be managed, something that's rarely done well.



    But now they will have opposing technology lines to manage. People trained in one won't understand the other. How will they integrate their networks? How will they explain to their customers which phones they can purchase, and which ones they can't?



    So, if I were a Sprint CDMA customer, and now its one company, what do I subscribe to? Is is T-Mobiles odd GSM implementation, which uses the 1700 band which no other GSM company does, or am I still a Sprint CDMA customer?



    DoI need to buy a GSM phone, or a CDMA phone? What happens when I move? Or if I'm traveling around?



    Can I choose to go from one to the other? Is my two year plan still valid if I want to go to GSM from CDMA, or the other way around?



    Am I on the very limited 3G service from T-Mobile, or the much more widespread one from Sprint?



    How is this going to work? Sprint had almost as much of a problem when they bought Nextel, and now there's a lawsuit over that mess:



    http://www.bloggingstocks.com/2009/0...rger-disaster/



    This will be a far bigger mess than that ever was, and Sprint has STILL not completely integrated IDEN into their network properly.
  • Reply 20 of 100
    melgrossmelgross Posts: 31,647member
    Quote:
    Originally Posted by SpamSandwich View Post


    The merger will look better for the bottom line. We're currently in a period of undervalued companies and those teetering near bankruptcy simply because of the economy.



    Keep in mind also that T-mobile would instantly have a large chunk of the Clearwire deal, opening T-mobile to WiMax. This would all make T-mo and Clearwire a more attractive company for Apple to deal with.



    Yuk!!
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