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How a Sprint merger could be the kiss of death for the ‘Uncarrier’

January 9th, 2014 at 4:05 PM
T-Mobile Virgin Mobile Comparison

An aggressive new wireless telecom pricing strategy led by a charismatic CEO hellbent on shaking up the industry? We’ve been there before, says NPD Group’s Eddie Hold, and it didn’t end in the glorious “uncarrier revolution” that many were expecting. As Hold notes, Sir Richard Branson’s prepaid Virgin Mobile carrier tried to do the same thing last decade and had some success until it got bought out by Sprint, which has typically been the kiss of death for smaller wireless carriers. 

“[Virgin Mobile] cultivated a ‘bad boy’ reputation, with Sir Richard Branson attempting to take on the U.S. wireless industry,” he explains. “The move was somewhat successful until Sprint bought Virgin’s U.S. operation and brought it more firmly into line with the status quo.”

This wouldn’t be an issue for T-Mobile… except there have been several credible reports indicating that Sprint is planning to make a bid to buy T-Mobile in the first half of this year. That said, Hold is bullish on T-Mobile’s prospects for the short run and he believes that offering to pay off subscribers’ early termination fees will only intensify the momentum the carrier has generated over the last year.

“Will T-Mobile’s move be successful? Of course,” he writes. “The carrier is already on a tear, with 4.4 million net new postpaid ads in 2013. This year looks set to be even stronger – particularly with the focus on family plans.”

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