With or without AT&T/T-Mobile merger, analyst says Sprint already lost

By on Sep 6, 2011 at 12:01 PM
Business September 6, 2011

Lead by chief executive Dan Hesse, Sprint has likely been the most vocal opponent of AT&T’s proposed $39 billion T-Mobile USA acquisition. The Department of Justice announced last week that it was filing a lawsuit in an attempt to block the deal, and while AT&T was none too happy with the news, Sprint predictably responded by applauding the DOJ’s decision to fight the merger. But even if the merger is blocked, Sprint has arguably already lost to AT&T and Verizon Wireless according to Stifel Nicolaus analyst Christopher King. “It essentially maintains the status quo, which, given the results of Sprint over the last couple of years, is not the best place to be,” King told The New York Times. Read on for more.

As Sprint continues to shed subscribers at an alarming rate — the nation’s No. 3 carrier lost 101,000 postpaid subscribers last quarter — analysts are rightfully beginning to wonder how Sprint’s situation will improve if AT&T and T-Mobile do not merge. With the amount of time and resources Sprint is putting into fighting the acquisition, this is certainly a valid question. The addition of Apple’s iPhone 5 is expected by some to bolster Sprint’s business when it launches next month, but each of the four major wireless carriers in the U.S. will carry the handset beginning next month according to reports. As such, the addition of the iPhone 5 could do more to increase smartphone sales among Sprint’s current subscriber base — and put more stress on the carrier’s network thanks to its unlimited data plans — than it will to attract new business.

Sprint’s 4G plans also weigh heavily on investors’ minds right now. Sprint announced plans to adopt 4G LTE in addition to its WiMAX services in a deal with LightSquared worth $13.5 billion for the carrier over the next 15 years. LightSquared is having issues with its LTE build-out however, as its spectrum is found to interfere with frequencies used by GPS services. Sprint’s WiMAX partner Clearwire is also planning to adopt LTE, but only if it can find the cash. Sprint is expected to discuss its 4G strategy next month during a press event on October 7th, where BGR will be reporting live.

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  • Ron Lunsford

    Sprint is losing 101k POST paid subscribers in a quarter, but gaining PRE paid subs at an alarming rate… The fact of the matter is with data hungry teens, Sprint owned Virgin Mobile is completely the best option. $35 for all you can text and download and 300 minutes for when the kids ‘actually want to talk’ is a great deal. Especially when compared to adding a family share line at $35+ after taxes and the premium charge now.

    The analysts continue to pound a company that has 50 million subs, and is technically growing… Now if Sprint’s LTE network can piggyback off T-Mobiles HSPA+ networks, couldn’t that be a team in the making (if the deal falls apart for AT&T that is)…

  • Eludium Q36

    The quoted analyst seems to have conveniently forgotten that Sprint was just about to acquire T-Mobile when ATT stepped in and stole the show. So when their bid fails out, Sprint can attempt again and their merger would size them much closer to ATT and Vzn, plus they’d be the only carrier to feature both GSM and CDMA voice networks. I like that scenario alot, but will it play out that way….

    • Anonymous

      Really? Source?

    • Anonymous

      It takes 2 years to get to the “let’s announce the buyout now”. So no, Sprint wasn’t can’t and won’t buy TMobile. Sprint doesn’t have the capitol nor the need for GsM

  • http://www.facebook.com/matthew.h.simmons Matthew Simmons

    If they get the iPhone their unlimited plan will be very appealing to a lot of people. 

    • Anonymous

      Only iPhony ignoramuses (which granted there are a lot of stupid people so maybe you are right lol…)

  • Asdfjkl

    sprint is ghetto and desperate…..  their furer against the ATT buyout screams desperation

    they don’t care about consumers they only care about their well being

  • Anonymous

    I’m planning on switching to Sprint as soon as my AT&T contract is up.  I’m fed up with AT&T..and I absolutely HATE Verizon..Don’t even ask me about T-Mobile.
    Hope Sprint can do something good with it’s LTE service

  • Uncle C

    Sprint is gonna be fine. They got the iPhone now. If they’re smart they’ll have an all you can eat plan for the iPhone at a reasonable price and Verizon and AT&T will immediately start feeling the pressure. Sprint has gotten a lot better. They need to sell whats left of next tell and they’ll be fine.

  • Anonymous

    Sad news if true.  I’m a Verizon customer, but I don’t want to see Sprint go down.  They have the best deals on data by far and I would join them if they were in my area.

  • http://JonaSyon.com Jona Sy

    Wow, such a negative article. Well I guess Sprint should just hang out the “Going Out of Business” sign since they can’t beat Ma-Bell west and Ma-Bell east.

  • Anonymous

    NOT a good look for tech-managers this year, is it! Bad decisions lead to future tears! lol

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