The last time Sprint made a major acquisition in the wireless space, it turned out to be an unmitigated disaster for both its own customers and for the company itself. Sprint’s 2005 merger with Nextel was the start of a downward spiral for Sprint that saw it lose millions of wireless subscribers to AT&T and Verizon and that saw it fall far behind in the race to deploy LTE due to its decision to instead use WiMAX as its 4G technology.
With this recent history in mind, it’s easy to see why federal regulators might question the wisdom of allowing Sprint to gobble up another wireless company. The Wall Street Journal reports, however, that Sprint chairman Masayoshi Son is meeting with the Federal Communications Commission this week to explain why his company’s potential acquisition of T-Mobile would be much better for wireless subscribers than the disastrous Nextel acquisition of the last decade.
The Journal’s sources say that Son is expected to argue that a T-Mobile-Sprint merger will be good because it will create a legitimate competitor to AT&T and Verizon, which for years have jointly owned the American wireless market. This argument would essentially be an admission on Son’s part that he doesn’t think Sprint alone can compete with Verizon and AT&T despite having enormous spectrum holdings that should make it the envy of the wireless world.
Earlier reports have claimed that the FCC for now is very cool to the idea of letting Sprint acquire T-Mobile, which explains why Son feels the need to go on a charm offensive with federal regulators before even making his company’s plans to buy T-Mobile public.