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Sprint T-Mobile Merger Could Occur Next Year

Dec 14 2013, 3:17am CST | by , in News | Technology News

Sprint T-Mobile Merger to Occur Despite Anti-Trust Hurdles
Image Credit: Sprint

Sprint is trying to woo T-Mobile towards its side. Sprint is preparing a bid to buy T-Mobile US in 2014. A merger is most likely to occur in the first half of next year despite anti-trust hurdles. The acquisition, if it occurs, will leave only three major mobile carriers in the United States.

Sprint is doing all that lies in its power to acquire T-Mobile which is its main competitor. In the capacity of the third largest mobile carrier in the United States, Sprint would face its rivals (Verizon and AT&T) head on were the merger to go as planned. Then there would only be three major carrier companies. 

However, the efforts by Sprint face anti-trust authorities such as the FCC. The issue of a monopoly is very real and so things won’t go as smoothly as they would have otherwise. The amount that Sprint is willing to shell out for this lucrative rival is $20 billion. Previously, AT&T had tried to buy out T-Mobile for $39 billion but it had failed badly due to opposition from regulatory commissions. 

Sprint was bought by the Japanese giant, SoftBank while T-Mobile was acquired by MetroPCS Communications earlier in their history. Now that these two are ready to merge, they could act as a bulwark against Verizon and AT&T which are the #1 and #2 carriers in the States. Nevertheless, the authorities’ reaction to this move by Sprint could derail the process. When contacted for comments, spokespersons at Sprint declined to offer any opinion regarding the matter. 

Meanwhile, Deutsche Telekom owns 67% of the shares in T-Mobile. Even when combined, Sprint and T-Mobile cannot have the strength in number of consumers that Verizon and AT&T possess. Yet the balance may be upset by this merger. Only time will tell whether the business deal is fruitful or even if it manages to take place in the first place.

Source: WSJ

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