“The recent Wall Street Journal report that Sprint will begin selling the new Apple iPhone in October of this year has sent waves through the telecom industry and ironically Sprint may not be the biggest beneficiary,” Trefis Team writes for Forbes.
“Although this deal will help Sprint gain more subscribers and reduce churn, it could be dilutive to its margins due to the higher subsidy costs associated with the iPhone,” Trefis writes. “Additionally, the deal could have significant implications for AT&T’s proposed $39 billion acquisition of T-Mobile which would vault AT&T ahead of Verizon as the largest wireless player in the U.S.”
Trefis writes, “AT&T has argued that the proposed acquisition of T-Mobile would not limit competition and disrupt innovation in the telecom market, but rather improve its service in a bid to provide 4G service to its customers. If Sprint does land the iPhone this year, AT&T can make a case that Sprint’s competitive position may actually improve, indicating that there is plenty of competition in the U.S. wireless market.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
I’m an AT&T customer, who would dearly love them to improve their call quality. That said, I still prefer that there be more competition to both keep my prices down and force AT&T to invest in their network. The idea of AT&T snapping up T-mobile sickens me.
Telecoms have always been gobbling each other up. Sprint acquired Nextel, and Verzion acquired MCI/WorldCom.
There is stil plenty of competition considering you still have the U.S. national carriers such as: Sprint, Virgin, Boost, MetroPCS.
With the merger, At&t will be improving their network by using the compatible T-Mobile network.
OK, so Virgin and Boost are prepaid services run by Sprint, and MetroPCS roams on the major companies outside of its relatively limited home areas. This is plenty of competition?
Paul speaks the truth. Europe’s mobile telecom market is infinitely better for the consumer — and, ironically, for the telecom providers too. America’s brand of corporate capitalism breeds duopolies that screw consumers in good times and bad — especially when they are “too big to fail”.
If the iPhone and its higher subsidized costs were really less profitable, then all these carriers would not be clamoring for the right to carry the iPhone. The carriers are making a lot of money off of smartphones, and the thing they like about the iPhone is they know they won’t have to fire sale them in 90 days.
Been waiting for a Sprint iPhone for a long time!
F#*%¥k AT&T!
“acquisition of T-Mobile which would vault AT&T ahead of Verizon as the largest wireless player in the U.S.”
What makes anyone think AT&T will be able keep most of the T-Mobile customers after the merger? When Apple releases the iPhone 5 and the lower cost iPhone to all the major carriers and maybe even the lower mobile companies, mobile users will have the choice of going anywhere.
Even the android makers will no longer give exclusive rights to specific models to just one carrier as now they have to compete with all the major carriers having iPhones. It will be a much more level playing field then before Apple introduced the iPhone exclusively to AT&T.