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Sprint and T-Mobile need to merge, or one will die says analysis

0. phoneArena 11 Apr 2014, 12:01 posted on

New Street Research has prepared a report for its clients that comes to the conclusion that T-Mobile and Sprint must merge, or else one of the carriers won't survive. Yet, the same report cautions that an attempt to merge the two mobile operators right now, would probably get blocked by U.S. regulators. In fact, earlier this year, Sprint Chairman Masayoshi Son and CEO Dan Hesse visited the FTC and FCC...

This is a discussion for a news. To read the whole news, click here

posted on 11 Apr 2014, 12:03 18

1. thedarkside (Posts: 654; Member since: 30 Apr 2012)

$50 bucks on sprint croaking first.

posted on 11 Apr 2014, 15:23 2

41. InspectorGadget80 (unregistered)

600$ says analyst should croak first and die in a miserably death

posted on 11 Apr 2014, 17:20 3

52. tuminatr (Posts: 814; Member since: 23 Feb 2009)

Not possible because they are now backed by Softbank, T-Mobile has much less money. Probibly what will happen is they will both do their best to compeate and get beat big time by Verizon and ATT

posted on 11 Apr 2014, 19:51 3

67. lsutigers (Posts: 821; Member since: 08 Mar 2009)

No way dude, not with Softbank and Spark. I think Sprint will gain significant momentum later this year and next with the new network and Sprint Spark LTE Advanced 100+ mbps speeds.

I don't think TMO will either, they would just be a much stronger competitor to the duopoly if they merged though.

posted on 11 Apr 2014, 21:53 1

71. tuminatr (Posts: 814; Member since: 23 Feb 2009)

True, it gives them alot more revanue from the customer base togeather they are roughley the same size as verizon or att. I have sprint and am happy with it. I do think thats gonna be a tough sell to the FCC

posted on 11 Apr 2014, 12:21 15

2. actuallyknowathingortwo (Posts: 7; Member since: 24 Sep 2013)

$100 bucks on sprint croaking first. t-mobile seems like the only company on the up rise. not to mention the data is fast as hell everywhere I have ever gone.

posted on 11 Apr 2014, 12:39 14

3. ajac09 (Posts: 1482; Member since: 30 Sep 2009)

RIP sprint

posted on 11 Apr 2014, 12:42 6

4. Augustine (Posts: 1043; Member since: 28 Sep 2013)

Or, Sprint dies and its assets, including spectrum, are liquidated among the remaining competitive three carriers.

posted on 11 Apr 2014, 13:45 6

16. SuperAndroidEvo (Posts: 4888; Member since: 15 Apr 2011)

You mean Verizon & AT&T because T-Mobile will never get spectrum from the government.

posted on 11 Apr 2014, 13:57 1

19. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

No, the spectrum will be auctioned off. Govt. may put some low-cost access spectrum on the table, to compel the carriers to provide lower cost broadband access.

posted on 11 Apr 2014, 12:44 7

5. kanagadeepan (Posts: 962; Member since: 24 Jan 2012)

Wait till Sprint becomes smaller than T-Mobile. Then allow T-Mobile to purchase Sprint. Sprint buying T-Mobile (though Sprint is now bigger one) is not a good idea, imho.

posted on 11 Apr 2014, 12:56 3

8. Commentator (Posts: 3715; Member since: 16 Aug 2011)

The problem is Deutsche Telekom wants to sell T-Mobile, not buy Sprint. The best bet is probably for SoftBank to purchase T-Mobile as well and just merge the two.

posted on 11 Apr 2014, 13:07 5

11. engineer-1701d (unregistered)

The best bet is Google or Comcast but then and start service cross my fingers it's Google I could see it being the best and fastest out there

posted on 11 Apr 2014, 14:01 1

21. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

Regardless of whether DT wants to sell T-Mo, the Feds ain't letting Sprint buy T-Mo. If DT really wants out of T-Mo, they need to find another buyer. Maybe DT does an offering to the public? I think their share market value is higher than what they purchased it at, so no loss for them. If they really want out, that could be a viable option.

posted on 11 Apr 2014, 14:45 6

28. grahaman27 (Posts: 361; Member since: 05 Apr 2013)

Let sprint just whither and die, and all CDMA coverage from Verizon as well.

posted on 11 Apr 2014, 14:46 2

29. Salazzi (Posts: 537; Member since: 17 Feb 2014)

It does not want to sell T-Mobile. It USED to want to, but about 1-2 months ago they announced they're no longer rushing to sell it and are willing to see where it's trajectory is headed. Seeing as T-Mobile is on the rise, I would put all bets on the fact that now DT doesn't want to sell the carrier. Look for an announcement by the end of Q2 announcing they're no longer looking to sell it whatsoever.

posted on 11 Apr 2014, 15:12 1

38. Augustine (Posts: 1043; Member since: 28 Sep 2013)

It's good to know, because I couldn't see the business-case to get rid of T-Mobile US when it accounts for 20% of DT's operating income and 30% of the assets. AFAIK, DT is a profitable company and doesn't need to sell its valuable assets do survive, does it?

posted on 11 Apr 2014, 18:02 1

57. tuminatr (Posts: 814; Member since: 23 Feb 2009)

go do some research on Softbank this would be a good deal for consumers because combined they would have enough spectrum and infrastructure to dominate. Softbank the company that owns sprint is the price leader in Japan and Chairman Son has said that his intent is to be faster than everyone else and be cheaper to do that he needs both companies customer base

posted on 11 Apr 2014, 18:21

62. Slammer (Posts: 1515; Member since: 03 Jun 2010)

Well, no bet is guaranteed. However money talks, and it was always on again/off again with Tmobile's sale plans. I don't trust John Legere. He wreaks like a used car salesman(or a phone sales rep).

John B.

posted on 11 Apr 2014, 12:45 7

6. Emmanuelz (Posts: 212; Member since: 01 Aug 2013)

The only one who's gonna die is sprint

posted on 11 Apr 2014, 12:49 5

7. Slammer (Posts: 1515; Member since: 03 Jun 2010)

Status quo in this industry is what survives. While tmobile is garnering media attention through tech sites, the reality is that tmo is not really shaking the industry enough to hurt the other carriers. The only thing tmo is doing is drawing the worst customers of the other three. In contrast, the other three have actually been adding subs in regards to Tmobile's sound bites. Sprint is now Softbank with a ton of cash backing. It's coverage tramples Tmobile's and Tmobile is still for sale. Anyone take a guess at which one will be swallowed up?

John B.

posted on 11 Apr 2014, 13:09 2

12. SellPhones82 (Posts: 569; Member since: 11 Dec 2008)

Exactly John, T-Mo is the consumer darling right now but DT has wanted to unload them for awhile and seems hesitant to invest the money needed to get their network where it needs to be. T-Mo needs Sprint much more than Sprint needs T-Mo. Softbank has the funds to do what ever they want so long as FCC and FTC approved. I also think the two combined would be capable of stealing away some of the "good" customers form AT&T and VZW and also start a true price war that would benefit customers on all US carriers.

posted on 11 Apr 2014, 13:38 6

15. omaianu (unregistered)

There is no basis for your claims whatsoever. How do you figure that TMO is drawing the "worst" customers? I would argue they are drawing the best and smartest customers. Those who are savvy consumers. TMO is definitely hurting Verizon and Att. People are leaving in droves. Keep in mind that the industry shake up is very young and is gaining momentum. It will clearly take 3-5 years, but if TMO continues to come up with consumer friendly policies and keeps working on their network, the numbers will be very different. Or VW and ATT will follow suit with new consumer friendly policies to compete. Either way, everyone wins.

posted on 11 Apr 2014, 14:03 7

22. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

+1. The only reason for the recent promotional moves by AT&T and VZW is due to the pressure from T-Mo. Take T-Mo out of the picture, and everything goes back to duopoly and the consumer gets screwed.

posted on 11 Apr 2014, 14:15 2

25. SellPhones82 (Posts: 569; Member since: 11 Dec 2008)

T-Mo is getting the AT&T and VZW customers that can't afford to stay with them. You and I know that T-Mo coverage pails in comparison to the big two so most customers are willing to stay and pay more to get more. Many people I work with switched to T-Mo, only to cancel within two weeks due to coverage, or lack there of. The $20-$30 saving a month isn't worth it if your phone doesn't work. T-Mo customer friendly policy are great for customers but kill their bottom line. In the end they still need actually make money at some point, otherwise how do they pay for network updated and more spectrum? T-Mo doesn't have 3-5 years to wait and see and if AT&T and VZW follow suit then why would customers leave them for less coverage at the same price? Everyone loves an under-dog, which is what T-Mo is at this point. I also think their "uncarrier" moves were put in place to make them a more attractive purchase. Like the guys that buy under preforming bars and run all kinds of drink specials to get more business, then sell it to someone else a year or two later for a profit.

posted on 11 Apr 2014, 14:25 3

26. Zsep123 (Posts: 6; Member since: 30 Mar 2014)

Worst customers as in, the ones who either cannot afford the other carriers or do not care about the quality of service they're getting. For a customer who's not just scraping by to make end's meet, $20 savings is not worth your phone not working when you need it.

Like it or not, T-mo's coverage is awful, and if you're financing a phone with them, the price difference isn't much. PLUS, employee discounts are gone now, so with taxes, the bill is about the same as if you were on a better carrier with a discount.

I definitely agree with the analyst here, and would love to see a merge, on the condition that new leadership is introduced. Heese is an idiot and Legere is just a jerk.

posted on 11 Apr 2014, 14:36

27. jroc74 (Posts: 6019; Member since: 30 Dec 2010)

Whats the definition of a smart customer? One that values price or service?

You cant really have both overall. Unless you go pre paid and get on a AT&T or Verizon pre paid carrier....maybe.....

Over the years T Mo and Sprint have always came up 3rd or 4th....depending on where I lived. AT&T and Verizon are surprisingly neck in neck for overall service.

A few areas near me Sprint shined...but those areas were so few it wasnt worth it....same for T Mo. Verizon has dead spots...so they arent perfect. But a dead zone for Verizon meant sporadic service....where that same dead spot for Sprint and T Mo meant no service...and thats outside...

posted on 11 Apr 2014, 14:54 3

31. Salazzi (Posts: 537; Member since: 17 Feb 2014)

You're high. Is that why T-Mobile is switching all their 2G into LTE? Is that why T-Mo will begin implementing 700mhz by end of Q2? Clearly they've got the cajones to do what needs to be done, contrary to what most people think and believe. And with all the new customers, investors are gonna be pouncing on this darling, and combine that with new customer funds, the network is going to challenge the top 2, and make Sprint irrelevant.

posted on 11 Apr 2014, 14:57 5

32. Slammer (Posts: 1515; Member since: 03 Jun 2010)

I can assure you that my view is correct. History has proven that the smaller carriers often make attractive deals that lure the groups of people looking to save money. Verizon and AT&T have consistently benefited by these moves because they have the money to match the price plan initiatives while the smaller struggle to make the revenue off of the customers that were the least profitable at the big two. The marketing of the a little more money but far better coverage will always attract the better customers. Once the smaller carriers have exhausted all initiatives and consumed allocated funds for these initiatives, the bottom line concedes to be economy class carriers. Those looking for good deals are the ones that spend the least. Sooner or later, carriers cease to exist by merge or purchase because the cash flow is no longer a sustainable number.

The break down here is that Tmobile is doing exactly what every other carrier in history has done as last ditch efforts to try and resuscitate itself. The larger carriers have always followed suit as a basis to retain customers while the smaller slowly whither away. Then it is back to normal. There is the old saying, you don't have to be the best, you just need to out live the competition. In this industry, AT&T and VZW have unlimited resources to out live the weaker. Duetche Telekom has showed very little interest in keeping Tmobile together. But, rather giving them life support until sale. Tmobile's moves resemble an over glorified prepaid carrier at this point. And that is exactly what type of clientele it is attracting. You can't claim for one moment that most of Tmobile's customers are of higher income status. If you can, show me the proof.

AT&T and VZW are pampered by the government and regardless of how people feel about Sprint, it has remained a strong 3rd carrier and has far more financial assets throughout the telecom industry to keep them relevent over tmobile.

John B.

posted on 11 Apr 2014, 15:57 3

45. Slammer (Posts: 1515; Member since: 03 Jun 2010)

As much as I crave a good blunt now and then, my getting high days ended in the early 70's. However, it appears yours haven't quite ended yet. Advancing on a network is mandatory but doesn't equate to being a force to reckon with. It is to stay relevent in a fast paced industry of technology. Tmobile is a 4th largest carrier that narrowly escaped consumption by one of the larger. It is only because of the failed merge that tmo has excess spectrum to play with. It needs far more than this to present a respectable coverage area to equal the amounts The other three have.

Look, no doubt tmobile is trying hard to make a name for itself. But it is important that you not get caught up in media hype contained to these sites. It clouds the real world judgement.

John B

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