AT&T/T-Mobile merger could put Sprint out of business

By on Sep 12, 2011 at 2:20 PM
Business September 12, 2011


Chitika Insights, Chitika’s research arm, recently proposed the question “What if AT&T and T-Mobile actually merge?” and created a graph of what the wireless landscape in the United States might look like if AT&T’s proposed $39 billion takeover of T-Mobile USA is passed. Chitika concluded there could be calamitous consequences for Sprint and various regional carriers such as Boost and MetroPCS. If the merger is approved, AT&T and T-Mobile will have more than 130 million subscribers and 51% of the U.S. wireless market based on usage, Chitika’s data suggests. “[The] projection shows the immediate impact of the merger, so the smaller network’s share looks unscathed,” the company wrote its blog. “However, the future consequences are dire for the smaller networks because the AT&T/T-Mobile network would be able to dictate market prices.” Sprint and smaller carriers such as MetroPCS and Boost may lose customers to “the greater combined coverage of the proposed behemoth,” too, while Verizon’s usage share would sit at 33%. “If this merger were to pass, it would almost certainly put companies like Sprint, MetroPCS, Boost, and other smaller networks out of business.” Chitika concluded. “Therefore, Sprint’s interference isn’t a surprising move in the least.” Sprint and the Department of Justice have both sued in an effort to block the merger.

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  • Clarkbartontx

    As we say in Texas, “MONEY TALKS, BULL SHIT WALKS” so now think how much money AT&T has paid out to put Sprint and other carriers in their coffins.  I’m sure Rick Perry (if given enough money under the table) will intervene.

  • Raul Santiago

    I don’t think Sprint is going anywhere. I predict that they’ll actually do better if the merger is approved for several reasons.

    1) With the elimination of T-Mobile, Sprint will be the last major value carrier.

    2) Their Network Vision Initiative should vastly improve service which will enable them to better market their service.

    3) In the face of a huge AT&T and Verizon, I think Sprint and regional CDMA carriers will look to eachother for support and survival. There are already signs of this. Sprint signed a roaming agreement with Leap Wireless aka Cricket. Now Cricket has full access to Sprint’s National Voice and 3G network and Cricket can now sell service pretty much anywhere Sprint has native coverage.

    4) The AT&T/Verizon behemoth should allow Sprint and the regional CDMA carriers to easily merge, if they choose to, with little scrutiny. If Sprint merged with Metro PCS alone they would add over 9 million customers. If they merged with all of the CDMA carriers, especially with those which have native networks in areas where Sprint doesn’t, they would not only gain customers but also grow their network and save on roaming costs.

    My major gripe with Sprint is the fact that they fumbled on 4G. They had a good headstart with WiMax. Sure, it’s not as fast as LTE nor is it as widely adopted, but it’s great, when you actually have WiMax coverage. I had an EVO (WiMax). Now I have a Samsung Charge (LTE). So while Sprint and Clearwire stall and stutter as to what the hell they’re going to do, Verizon continues it’s rapid LTE expansion. WiMax can compete with LTE, again not as fast, but not at all far behind.

    A bit off subject but imagine this….If Wal-Mart put a cell tower on the premises of every Wal-Mart location in the U.S it would have a Nationwide network of it’s own. They could then use their clout to acquire roaming agreements to fill gaps in coverage. Phone manufacturers will be as enthusiastic to make phones for Wal-Mart as they are for making phones for Verizon and the like. Just one thing, don’t call it Wal-Mart mobile. The Wal-Mart name is associated with low prices which is usually translated to cheap. They should call it Walton Communications or something like that. Make it a subsidiary and promote the fact Wal-Mart created it and has it’s back financially, but make it a self-sustaining business.

  • Peter Goesinya

    Sprint isn’t going anywhere. With the government getting involved, this merger will either not go through or it will be so watered down with mandates that it will be irrelevant to the smaller carriers.

    Stop fear mongering bgr. This is ridiculous.

  • Anonymous

    How could it put Sprint out of business? What bout Verizon I know Verizon is the #1 carrier in the country. I think AT&t wants to buy T-Mobile and take it’s name away and be the only GSM provider. I don’t think it’s fair for us the consumers to choose only AT&T as a GSM network. Plus I’m sure lots of T-Mobile consumers that left them doesn’t wants to deal with AT&T bad customer service and to mess up data plans and having LESS T-Mobile stores. Which I say it’s wrong for AT&T to do that cause it’s also bad for the economy.

  • Anonymous

    I applaud sprint and trust me this merger will not happen

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