T-Mobile purchase might force Sprint to cut prices

T-Mobile purchase might force Sprint to cut prices
Analyst Craig Moffett has identified a quandary that Sprint finds itself in. Moffett says that Sprint has been unwilling to cut its prices for fear that its stock will fall. Sprint chairman Masayoshi Son might have to take an ax to its prices anyway, if it does purchase T-Mobile. The latest rumors have Sprint offering $40 a share to buy the carrier.

Sprint customers spend $62 on average each month for service, while customers of T-Mobile pay just $50 each month, on average. Michael McCormick, an analyst at Jefferies, says that this gap cannot last in the case of a merger. "It is not a sustainable situation. If the companies merge, they will need uniform pricing across the company," said the analyst. There are parts of the deal that would be very positive for Sprint. A merger would allow the nation's third largest carrier to save $6.6 billion on network equipment and operating costs. 


Getting the deal past U.S. regulators is the hard part. Both the FCC and the FTC have expressed their reluctance to allow the nation's third largest carrier to buy the fourth largest carrier. Sprint, on the other hand, insists that allowing it to buy T-Mobile will allow the combined carrier to take on the Verizon-AT&T duopoly at the top of the industry. A combined Sprint-T-Mobile would have over 100 million subscribers, just behind Verizon and AT&T.

source: Reuters

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28 Comments

1. ajac09

Posts: 1482; Member since: Sep 30, 2009

They say their is only 10% chance the merger will be approved anyway.

5. gnotch

Posts: 19; Member since: Dec 31, 2013

lets hope so ~ i want t-mobile to stay separate.

8. engineer-1701d unregistered

i have had sprint for 12 years plus i hate them but they do release the google updates first, and tmobile push the mobile world sprint carry alot of great phones, i really do think if these 2 get together with the direction of a good lead team they will pass att and give us all the service we should have t-mobile is better is some areas than sprint and vise a versa so its really a win win plus we drop the price on contracts, and keep jump its a great plan if executed correctly

2. Augustine

Posts: 1043; Member since: Sep 28, 2013

"T-Mobile purchase might force T-MOBILE TO RAISE prices" There, fixed it for you.

3. Shatter

Posts: 2036; Member since: May 29, 2013

The two will be merged into a brand new carrier that uses T-Mobiles network led by Legere as CEO if the deal goes through. Hopefully Softbank is ready to foot the bill to merge two networks that don't even use the same technology and are completely incompatible with each other...

4. HASHTAG unregistered

That's just speculation.

9. engineer-1701d unregistered

sprints future pipelines that have been testing have set world records or 2.1 gb a sec, the spark tech will combine the t and s lte bands and 3g from hspa.

13. Slammer

Posts: 1515; Member since: Jun 03, 2010

LTE is one technology. Both use LTE. The argument of merging two dissimilar technologies is false accusations anyway. AT&T and Verizon have been doing for years now. VZW picked up GSM carriers and switched them over to CDMA as did AT&T with CDMA carriers to GSM. To further point out, GSM and CDMA will be history in the next couple of years..Combining infrastructure will allow a better competitve race against the cartel of big red and big blue. John B.

16. Professor

Posts: 223; Member since: Aug 02, 2013

Knowing Sprint tacties of buying and destroying companies just to get their spectrum (like NEXTEL) if they don't destroy T-Mobile (and MetroPCS) you can be sure they will just raise their prices to match those from Sprint...

26. g2a5b0e unregistered

You hit the nail on the head. Although truth be told, T-Mobile will have to raise prices in the near future anyway to be sustainable.

6. wilsong17 unregistered

why why put cdma and gsm you know how long is going to take to change cdma to gsm

27. tokuzumi

Posts: 1929; Member since: Aug 27, 2009

With everything moving to LTE (voice and data), combining networks will be less of an issue. Eventually, the CDMA (1X, 3G) networks will be shut down, and everything will run over LTE. Traditional GSM networks (edge, 3G, maybe HSPA) will be shut down, as well. This will make phones easier to design, as the chips don't need to support as many network bands. Sprint is the only major US carrier that does not support band 4 LTE. Verizon/T-Mobile/AT&T all use band 4 for LTE. Granted, we are at least 10 years from the legacy networks from being shut down, but it will happen at some point.

28. Augustine

Posts: 1043; Member since: Sep 28, 2013

The most aggressive carrier to switch off 2G and 3G is ATT, and even then it forecast this move in 3 years. No new carrier out of a merger can afford jump ahead in the future 3 years or wait 3 years to solve its network issues. Whatever will happen to 2G and 3G, it's not going to happen now or in the near future.

7. nwollack

Posts: 2; Member since: Apr 28, 2014

If you have not realized this is happening and there is no stopping it. Also when it does happen the goal Son has is to slash prices. The real world picture would be 40 as low 30 for 1gb n unlimited talk n text. Then you add unlimited option n customer purchase there device and stop complaining then you have a force to take Verizon n att on. US customer have to learn to pay for there phones n not complaining about cost. High bill, low phones. Pay for phone low bill. I paid for my device n have bill $ 54 plus tax with sprit with protection n full unlimited. T-Mobile is 50 with no protection plus taxes

12. wilsong17 unregistered

SORRY but sprint LTE is crap i live in nj and tmobile lte cover most of nj pretty good but i can say the same from sprint i pay 88 for insurance plus international call and unlimited lte i can be proud i use about 70gb a month

21. engineer-1701d unregistered

how the hell do you use 70gb a month downloading porn movies 2 times a day

23. alexandrecastro

Posts: 26; Member since: Feb 23, 2014

He probably shares his connection to his computer. That's what happen when LTE is faster than your home Internet.

24. joe1blue

Posts: 169; Member since: Jul 25, 2013

All Son will do is match Verizon and AT&T with their high prices and if he does this what can we do at that point? Nothing but scratch our heads asking how did we get to this point. Son will be out to make his money period and who can blame him, we as the consumers need more choice the government should have stopped at&t from merging with Cingular way back then same goes for sprint and nextel and Verizon and whoever they bought, if we had like 5 different major carriers they would be fighting for subscribers and we would've watched those prices drop like flies, and you would've seen much more ads with one company attacking the other which we dont see anymore which proves my point.

10. darkdestroyer1

Posts: 1; Member since: Jun 09, 2014

SoftBank USA

11. fzacek

Posts: 2486; Member since: Jan 26, 2014

Wouldn't they also need a uniform network type between the two carriers? T-Mobile is GSM and Sprint is CDMA, so how would that work if they merged?

14. Slammer

Posts: 1515; Member since: Jun 03, 2010

LTE is forefront now. Both use LTE. CDMA and GSM will be phased out. And as I just recently posted, seperate technologies never stopped VZW and AT&T from purchasing different technology carriers and convert them. John B.

18. corporateJP

Posts: 2458; Member since: Nov 28, 2009

Networks will be linear in the near future, but if it happens today, it would be a shear mess with Sprint pulling the strings. Nextel is a fond memory...

15. Professor

Posts: 223; Member since: Aug 02, 2013

The Sprint T-Mobile merger will only make Verizon and probably AT&T stronger because many customers (like me) that hate Sprint are going to switch to Verizon or AT&T. In my case I am not going back to Sprint not even if their lower their prices to $29.99 per month!

17. InfDaMarvel

Posts: 18; Member since: Oct 20, 2010

Sprint is a brand..Professor lmao. It wont even be "Sprint" or "Tmobile". I also wanna make a comment to those of you are confused on how they will combine the networks. Its pretty simple, LTE and Voice over LTE which already exist if you didnt know that either. Main point in the Article, 6.6 Billion. Take a second and think about that.

22. engineer-1701d unregistered

yup pay back in 5 years

19. corporateJP

Posts: 2458; Member since: Nov 28, 2009

Sprint would botch a one-car funeral. Softbank may own them now, but the same invalids still run and operate the company that have for more than ten years. Same people who thought that running people off their network and collecting termination fees was better than keeping the customer. Sprint = Asswipes.

20. joe1blue

Posts: 169; Member since: Jul 25, 2013

I see a dark future for us all if this merger goes through.

25. thegodfather

Posts: 23; Member since: Nov 27, 2013

Switch to Republic public wireless 25 bucks a month unlimited everything

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