At what point would it be appropriate to suggest that T-Mobile should buy Sprint instead of the other way around? Barron’s flags a new research note from RBC Capital Markets analyst Jonathan Atkin, who says that T-Mobile’s pledge to pay off rivals’ early termination fees could have an absolutely devastating impact on Sprint, the company that just happens to be working on a plan to buy up America’s “Uncarrier.” How bad might things be for Sprint? Well, consider that the consensus expectation for this quarter is that Sprint will report losing somewhere in the neighborhood of 365,000 postpaid wireless subscribers… and Atkin says that estimate was made before factoring in T-Mobile’s ETF payout gambit, which he says could “lead to wider losses” for the carrier than anyone had previously imagined.
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. More →
Sprint and parent company SoftBank haven’t officially announced their intention to acquire T-Mobile yet, but about a dozen independently confirmed reports from various news organizations state that an announcement is imminent. Sprint is meeting with regulators, SoftBank is meeting with T-Mobile owner Deutsche Telekom, and banks reportedly tripped over themselves to offer financing for the deal.
While opinions are typically mixed on big M&A events like this, industry watchers seem to agree across the board that a Sprint/T-Mobile deal is an awful, awful idea. Some cite technical issues with integrating the two networks and some cite insurmountable regulatory hurdles as the reason this entire ordeal is a waste of time. While there’s plenty of coverage and analysis out there for those interested in learning more about the issues at hand, one industry watcher did a good job of laying out all the reasons this soon-to-be proposed merger is probably a terrible idea. More →
Regulators at the United States Department of Justice don’t sound very keen on the idea that America’s hottest wireless carrier should get bought up by the wireless world’s perpetual loser. Unnamed sources tell The Wall Street Journal that DOJ regulators indicated to SoftBank CEO Masayoshi Son and Sprint CEO Dan Hesse that they were cool to the idea of a Sprint-T-Mobile merger during a recent meeting with the two executives. The Journal’s sources say that “U.S. antitrust authorities regard the current lineup of four national mobile-phone carriers as important to maintaining a competitive market, and department officials indicated at the meeting that a deal combining Sprint and T-Mobile could face regulatory difficulties.” Even so, the Journal says that this meeting hasn’t dissuaded Son from pursuing the merger, which isn’t surprising given that he said he originally bought Sprint because “I am a man, and every man wants to be No. 1, not No. 2 or No. 3.”
When T-Mobile CEO John Legere first addressed rumors that Sprint and parent company SoftBank might make a play to acquire T-Mobile USA, he openly bashed Sprint and its network. But in a sign that such a deal may in fact be in the works, the outspoken CEO has softened his stance in recent days and stated on several occasions that a potential Sprint-T-Mobile merger has several upsides. More →
The Nextel brand has been dormant ever since Sprint shut down the iDEN network last year, but in order to put any remaining rumors to rest, the company has made the death of Nextel all but official in a recent interview with FierceWireless. In the interview, Matt Carter, president of Sprint Enterprise Solutions said that he has not heard anything about the return of Nextel. Clearing up the matter entirely, Sprint spokesman John Votava then told FierceWireless that Sprint has “no [plans] to bring back the Nextel brand.” Sprint and its parent company SoftBank believe that enterprise business is an important part of the carrier’s future, but Nextel will apparently not play any role in that future.
Where there’s smoke there’s fire, and Sprint’s rumored upcoming T-Mobile takeover bid is a blazing inferno right now. Numerous reports have suggested that Sprint and its parent company, Japanese wireless carrier SoftBank, are discussing a possible deal to combine the No. 3 and No. 4 carriers in the U.S. with T-Mobile parent company Deutsche Telekom. Banks were reportedly jumping at the opportunity to finance the deal and more recent reports suggest Sprint now has several offers in hand to fund the merger. While such a deal would undoubtedly face some serious regulatory hurdles, the mere possibility that such a deal could take place has prompted the Communications Workers of America — the nation’s largest labor union for communications workers, with more than 700,000 members — to issue a statement condemning the merger. More →
Over the past year, T-Mobile has unleashed a series of bold new initiatives aimed at stealing customers away from wireless giants AT&T and Verizon. So far, fellow underdog carrier Sprint has responded with… Framily Plans. However, leaked documents obtained by AndroidCentral suggest that Sprint is planning to step up its game a little bit in the near future by offering its subscribers Wi-Fi calling, a feature that essentially lets you have unlimited calling as long as you can hook up to a Wi-Fi network. Of course, T-Mobile has had Wi-Fi calling available in some capacity for years so Sprint isn’t exactly breaking new ground here. AndroidCentral’s leaked documents suggest that the first Sprint devices to get access to Wi-Fi calling will be the Samsung Galaxy S4 mini and the Samsung Galaxy Mega.
Consumers and businesses in America spend billions on wireless service each year. And it’s no wonder — the average cost of cell phone service on each of the top four nationwide carriers in the U.S. is painfully high. One is higher than the rest, of course, and you’ll have to try to act surprised when you find out which it is. More →
The potential for a merger between Sprint and T-Mobile is tenuous at best, but a recent move by T-Mobile’s parent company might signal that the two wireless carriers are considering giving it a try anyway. Re/code came across a regulatory filing on Thursday which states that Deutsche Telekom has reorganized its U.S. holdings, moving them from Germany to a wholly owned subsidiary in the Netherlands. According to BTIG Research analyst Walter Piecyk, holding a stake in the Netherlands can be very “tax-efficient” for a company looking to sell its assets. More →
We already know that T-Mobile added roughly 869,000 net postpaid subscribers and 1.645 million total net customers in the fourth quarter of 2013. But how did that compare with the rest of the wireless industry? Business Insider reports that a new study from Consumer Intelligence Research Partners (CIRP) shows that in Q4 2013, T-Mobile showed a bigger increase in its customer base than Verizon, AT&T or Sprint showed over the same quarter. More →
Postpaid churn, or the number of postpaid subscribers that stop using a provider’s service during a specified period of time, is always a stat industry watchers keep an eye on when it comes to wireless carriers. Why? The U.S. wireless market is so saturated that most new subscribers a carrier sees in any given quarter are coming over from another carrier. With fourth-quarter financial results from each major carrier on the way, Cowen and Company has published its Q4 study on subscriber intent with regard to switching wireless service providers. Who might be the biggest winners and losers of Q4 when it comes to postpaid churn? Cowen’s new study could give us a good idea. More →
T-Mobile’s Uncarrier initiatives are great for a number of reasons. For one thing, they have direct and obvious benefits for consumers, who can enjoy a number of ways to save money thanks to T-Mobile’s new plans. For another, they’re shaking up an industry that has historically been anything but consumer friendly. There may end up being another, potentially more important benefit, however: T-Mobile’s Uncarrier policies and low plan prices may help convince regulators to block any potential takeover bid from Sprint. More →