Sprint to benefit from AT&T merger with T-Mobile says analyst
Larsen says that by buying T-Mobile, AT&T could become a monolithic unwieldy giant that might not appeal to some customers, who would most likely end up at Sprint. That thinking makes sense, for if some of T-Mobile's current account holders liked the idea of signing up with the smallest of the top 4 carriers, they might feel lost suddenly being a customer of the largest U.S. carrier. And if the deal does go through, Sprint becomes the smallest of the remaining 3 major U.S. carriers.
There is another reason to expect some AT&T and T-Mobile customers to jump ship-although not necessarily by choice. In areas where the AT&T/T-Mobile customer base is too concentrated because of the merger, the combined company might be forced to divest such markets and Sprint will be there with a net to snatch up new customers. The analyst also feels that after the merger, customers might see prices rise with one less carrier to compete against, helping Sprint's profit margin.
Besides possibly benefiting from the merger, Larsen sees Sprint getting the Apple iPhone this fall. Going out down the road, he expects Sprint to develop its own LTE network instead of continuing to offer 4G through Clearwire's WiMax service.
With all of the potential new Sprint customers that could jump to the carrier if the buyout of T-Mobile is given the green light, it might behoove CEO Dan Hesse to just give up and let nature take its course. And who knows, one day it might just be Hesse on the other side of the story, seeking approval for a buyout of Sprint.
source:Forbes via BGR
1. @randrums (unregistered) posted on 21 May 2011, 01:30 3 3
I'm almost certain that Dan Jesse stated that Sprint would never offer the iphone.. the video is out there. I hate the iphone, and that's one reason I chose Sprint.
3. AndroidTroll posted on 21 May 2011, 07:19 9 5
I agree, I do not want the data hog dumb iphones on Sprint taking up all the bandwidth. iOS is designed to hog data all to itself without giving a fuck about network usage. Android is smart and manages data like a team player so that all users can have a good experience.
2. Zara Hills (unregistered) posted on 21 May 2011, 04:18 1 0
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4. belovedson posted on 21 May 2011, 09:10 0 2
This article makes no sense. Many subscribers choose a phone provider based on best available service in the area and/or costs. Such stupid points tmobile and att are trying to make. Can they make any legitimate claims
5. remixfa posted on 21 May 2011, 09:11 4 1
Dan Hesse isnt trying to stop the merger. Its a farce. I've said before, sprint only stands to GAIN from the merger as far as customers go. They might lose a few exclusives but they will make more money over all.
What Dan is doing is the same thing Google did during the Spectrum Aquisition. He is playing a part, pounding the gavel and making noise, to pressure the FCC to give certain aquisition concessions. He is making sure that Tmobile gets broken up and he gets pieces of it, instead of ATT getting everything.
7. Gawain posted on 21 May 2011, 15:10 2 0
The only fly in the ointment of that plan is that Sprint is not going to be able to leverage themselves much further to acquire those divested overlap markets of an AT&T/T-Mobile merger (of which there will be hundreds, think VZW/ALLTEL x2).
I think your point is valid, but Sprint's financial position is what makes me think he is serious in trying to stop the merger.
10. remixfa posted on 21 May 2011, 18:42 1 1
they will find the money to get the divested markets.. dont worry. ATT got 2 million off the Alltell merger.
Why would he want to stop the merger? If it goes through, Sprint will be the only viable national "4g" value carrier left. That puts them in exellent position to get the bulk of the pissed off tmobile customers that will leave before/after the merger.
If i were sprint, i would run a "tmobile only" port in special when the merger goes through (like pay off ETFs or even cheaper phones or something) to get into that "i hate ATT and dont want to be part of them" mania that will happen.
"dont wanna be part of the evil empire? come to sprint and we'll pay off your ETFs for the trouble!"
13. Gawain posted on 21 May 2011, 21:53 0 0
The difference is that AT&T's debt to equity ratio is about a third of what Sprint's is, on revenue that's about 4 times as big as well. Sprint's total debt exceeds its market cap. They can't just float bonds and make it happen, and they can't tap too heavily in to their cash either because of their negative net income trends.
AT&T was able to make off well in the VZW/ALLTEL MSA/RSA swaps because the other regional players were already there, and Sprint didn't have the cash to tap into those markets either.
Certainly Sprint would be forced into some kind of aggressive marketing to try and attract the die-hard T-Mobile fans, but those campaigns don't yield the numbers we all think they do. Then, once that's done, they don't have a T-Mobile to compete against anymore...all they have is AT&T and VZW. VZW customers know what they're getting nickle-and-dimed with. AT&T customers either love it or don't, for whatever reason they stay. It's not where I would want to be...
The T-Mobile customers will be "reassured" and "promised" etc...a lot of folks will want to wait it out, because, even if the merger were approved tomorrow, it would take a year to complete, plus another 6-12 months to really absorb all the T-Mo folks and divest the overlaps.
What you're contending is certainly possible, but Sprint is not the money power house you think they are. Taking on an overlap market means adopting *another* standard, plus expense to convert the market, plus expense to offer equipment to the customers, plus whatever Clear is doing...GSM/CDMA/iDEN/WiMax...
11. DUH (unregistered) posted on 21 May 2011, 20:37 0 0
Question if the merger is approved How does sprint survive in the long run. Sprint only makes gains in the short term. There will be handful of millions of people leaving for sprint. Thats A temporary boost in the long run. Post merger at&t will still have over 120 million clients, while verizon we hover around the 100 million mark. Capitalism drives this country. I'll introduce you to supply and demand. Phone and Tablet manufacturer's produce said goods. Now do i initially choose sprint who may have at best reached 70 million clients or go with the two cell phone giants where there are more opportunities to make money. Personally as a manufacturer I'll go with the top two. Prime example verizon and at&t are considered the top two now, as we all know apple premiered with at&t then went to verizon, whether sprints wants it or not doesn't matter. You guys can knock apple all day, (I do as well) but they sell a product thats in high demand. Any business owner or entrepreneur will tell you to be successful u must maximize profits and minimize cost.Eventually sprint will fall behind, they will make business decision to keep them competitive but they will get knocked out. there is no way they will be able to compete unless the offer goods and services that the top 2 cant produce.
6. snowgator posted on 21 May 2011, 10:24 2 0
Most of these points have been discussed by bloggers on this site. Nothing new here. That is why I post and read so much here- the people who write on these threads know what they are talking about.
12. Jeradiah3 posted on 21 May 2011, 21:49 0 2
this is a good opportunity for him to get customers since people dont like the AT&T and Tmobile merger.
What I dont get is why is Hesse so ANAL about a merger that has nothing to do with him. he needs to worry about his own network instead of acting like a damn child and dipping his face into this. We all know that this is PR for Sprint to gain attention since no one wants the "poor man network" lol
smh. Id rather stay with a network that is moving up (AT&T), instead of a company that is losing its respect every time its CEO is talking (Sprint)
14. samirsshah posted on 21 May 2011, 23:00 0 0
The merger may help BOTH Sprint and Verizon. (Thunking Loud).
15. Glib Rib (unregistered) posted on 22 May 2011, 01:22 0 0
I'd rather stay with a company whose calls don't drop every other minutes.
16. Albot (unregistered) posted on 22 May 2011, 05:44 0 0
I do understand that the merger can benefit Sprint, but what I do not understand is how will this help the market for GSM phones in the USA. With the merger, now there will be only one choice of a GSM network in the US and since the USA is a country were carriers select what phones to support or subsidize, the choice of GSM devices in the US will be severely damaged. Not only that but also, one will not have a choice of GSM networks whatsoever leaving only the choice to either go CDMA or GSM. I travel quite often. which is the main reason I use a GSM phone so I can change SIM cards between countries in order to avoid extreme roaming fees. With this merger, my selection of GSM phones in the US will not be determined by my own choice but rather whether AT-T supports it or not, and to allow only one company to determine what kind of phone you want is quite infuriating.
17. dkpitman posted on 22 May 2011, 12:19 0 0
This article is about why Sprint would prosper, while Dan Hesse is trying to make a point that the overall negative impact on all of the mobile network companies will be great. The short term benefits might be a jump in stock, and picking up what ATT decides to abandon now, but the impact made to the mobile network companies as ATT gains steam will inevitability cause a shift in that sector of the market and put the rest of the mobile network companies at an unfair disadvantage.
18. gaby1451 posted on 22 May 2011, 18:21 0 0
This is all speculation as to wether or not sprint will benefit (to the extent the analyst states) from this merger. Make no mistake, the merger is a bad idea for everyone, and the analyst herself even confirms that prices will rise with the new GSM behemoth. So, despite the the minor wins Sprint might get, its in the best interest for EVERYONE for this merger not to go through and maintain the status quo.
19. ArmageddonX posted on 23 May 2011, 20:29 0 0
It's just a matter of time before Sprint gets bought out. Either by Verizon or by Google.
20. froyotlbw88 posted on 21 Oct 2011, 08:42 0 0
It's funny reading this now. Sprint has the iPhone. 4G LTE coming soon. Lol