Sprint Corporation Seeks Takeover of T-Mobile to Compete Against AT&T and Verizon

technology, sprint, t-mobile, takeover, fcc, doj

Could the top four major carriers, become three? This question is being poised as rumors are surfacing that Sprint Corporation is considering a takeover ofT-Mobile to bolster competition against AT&T and Verizon. This takeover process is something Sprint executives are eyeing for the early part of 2014, reports The Wall Street Journal.

The Pros of a Takeover?

The process of review is necessary when it comes to a takeover. Removing the eye-rolling concept of regulatory issues, this move could be a win-win for both companies. Verizon encompasses the national market on the CDMA network. AT&T is the largest and most dominant of all carriers, buzzing their global strength on a GSM network. Considering the two titans of concrete mobile control, Sprint Corporation and T-Mobile should piece a beautiful puzzle together. Competitive pricing can endure, strengthening the playing field of competitive interest for consumers. In addition, the data networks can become more reliable, faster when merging the technologies of these two companies. T-Mobile is managed by Germany’s Deutsche Telekom company and the executives are not happy remaining at number four. There has been previous rumors of the long-time company leaving the U.S. mobile markets. The regulatory practices prefer four major carriers in the U.S. for consumer selection, but what will happen if T-Mobile takes leave of the market? The overall consideration factor should be there for this takeover, especially since the two companies do not lead in subscribers within the United States.

The Cons of a Takeover?

Of course there are both sides to every considerable takeover. Sprint Corporation relies on the CDMA network with a dash of LTE. T-Mobile devices are compatible on the GSM, HSPA+ network. They both find a slight compatibility when it comes to the FD-LTE band. Overall, a lot of energy will be implemented to merge the technology and locate the point of compatibility. Plans for one side would have to change and it seems the sacrifice would come from T-Mobile, if Sprint Corporation takes the lead on this takeover. This could mean the end of programs like Un-carrier and the global unlimited – two programs T-Mobile is currently expanding to their customers.

With any consideration of mergers or takeovers is the next biggest issue- layoffs. Would a Sprint Corporations takeover of T-Mobile unbalance employment numbers? Possibly. Once takeovers are concluded, the lead company can determine how to trim, what they may deem, excessive costs. This tends to begin in the customer service rooms over senior management. With a roar, usually comes a fire – which encompasses many employees. Speaking to a local T-Mobile employee, he expressed concern at the news, “I had no idea this was being considered. If management mentions something soon, it may be time to refresh my resume.”

To Be or Not to Be?

Sprint Corporation is still considering the implications of regulations, approval and network compatibility. If there wasn’t enough wrenches to consider, Dish TV is also considering placing their name in the ring of takeover contenders. More than likely, the nod would go to Dish TV over Sprint Corporation. U.S. regulators want four major carriers, regardless they seem to be failing or not. Dish TV has considered moving into the wireless industry for sometime. An inquiry was delivered to Dish, but representatives have declined to comment.

While regulators may be preemptively shaking their heads, Sprint Corporation and T-Mobile are looking to show how they can form a “logical ultimate combinaton,” states T-Mobile’s CFO, Braxton Carter. The Justice Department and the FCC will be the hardest to sell the idea to and their declination would mean the end of the takeover bid. Sprint Corporation may consider taking over T-Mobile, but only the U.S. regulators will decide if that will come to fruition. It would be a key contribution to join forces against the competitive powerhouses of AT&T and Verizon.

 

Angelina Bouc

Sources
Reuters
Wall Street Journal
ZDNet

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