Will Verizon Buy Sprint Now?

Posted: Mar 21 2011, 11:43am CDT | by , in Rumors | Technology News


Will Verizon Buy Sprint Now?
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It seems inevitable.

Ladies and gentlemen, the unthinkable has happened. The T-1000 of phone companies has gathered up another wayward chunk of lost spectrum. T-Mobile will be absorbed by AT&T for a sweet $39 billion. It is hard to see this news as anything but apocalyptic: in one fell swoop, GSM users in the United States were reduced to one nationwide option. Choice just took a nose-dive, it may be on the verge of an irreversible tailspin.

The most exciting thing about the theorized Sprint / T-Mobile merger was the idea that a third legitimate competitor might fall into the mix. Together, the two carriers would have topped 83.7 million subscribers. Well below Verizon's 94 million, but within spitting distance.

Instead, AT&T will balloon ahead of even Verizon. Sprint will be left far behind, tasting dirt and struggling to come up with a way to compete. They may come to the conclusion that their best chance comes from joining up with Big Red.

There's some historical precedent here. When Southwestern Bell bought AT&T in January of 2005, Verizon immediately followed up with the purchase of MCI. Acquiring Sprint would allow Verizon to keep their lead, and the fact that both carriers use CDMA would make the process relatively smooth. With the notable exception of WiMAX.

Sprint and Verizon currently use incompatible "4G" technology. This is unlikely to continue if a merger occurs. We've been hearing rumors of Sprint abandoning WiMAX for quite a while now. If Project Leapfrog actually exists, Clear's technology is already on its way out. LTE will dominate regardless of what happens with these squabbling carriers.

But Verizsprint would still have millions of WiMAX customers to care for. Which could drop Sprint's asking price even more than the 11% stock plummet already has. The new company will have to either support a "dead-end" technology for years to come, or compensate a huge number of customers in some as-yet-undefined way.

If the AT&T / T-Mobile deal meets with regulatory approval- and there's no guarantee it will- some sort of deal between Sprint and Verizon is inevitable. Competition, we hardly knew ye.

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The Author

<a href="/latest_stories/all/all/5" rel="author">Robert Evans</a>
The excitement about new smartphones, tablets and anything mobile drive Robert to unearth the latest rumors and developments in this fast moving space. He adopted 4G as soon as it become available and knows where the mobile market is going.
Robert can be contacted directly at robert@i4u.com.




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