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Sprint reconsidering T-Mobile Purchase after Sour Reaction by Regulators

Feb 11 2014, 11:15am CST | by , in Rumors | Technology News

Sprint reconsidering T-Mobile Purchase after Sour Reaction by Regulators
Wall St Cheat sheet

Could be several weeks before Sprint moves forward if it doesn't ditch the plan altogether

Sprint is the third largest wireless carrier in the US behind AT&T and Verizon who are well ahead of third place Sprint and fourth place T-Mobile. The problem that Sprint has is that there is no longer a large number of subscribers out there who are looking for service. It has also been unable to woo large subscriber numbers away from the other carriers leaving its growth stagnant.

Sprint sees its one chance at significant growth being a purchase of T-Mobile USA. The problem is that federal regulators have told Sprint and T-Mobile executives that they like a wireless industry in the US that has more competition. Some even said they like having four carriers in the US and they are skeptical of the merger. Similar reactions were offered to Sprint and T-Mobile from the FCC and from the Department of Justice. Regulators won't approve any merger that will harm competition in the market.

Reports have surfaced that Sprint chairman Masayoshi Son is now reconsidering the purchase of T-Mobile reports Wall St Cheat sheet. The report claims that Son is keen to complete the deal but doesn't want to move forward if the deal is "outright impossible." The struggle he faces is that the regulators aren't likely to let him know the deal is impossible until T-Mobile and Sprint take the plunge and try to merge.

If Sprint does decide to move forward with the deal, rumors suggest that it will be several weeks or longer before things move forward. One of the arguments that Sprint and T-Mobile are expected to use is that with the strength of AT&T and Verizon, neither Sprint nor T-Mobile will be able to build out wireless networks to compete on their own.

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