“Deutsche Telekom may be forced into a tie-up of its sub-scale U.S. wireless unit with Sprint Nextel after a $39 billion deal with AT&T collapsed,” Maria Sheahan reports for Reuters.
“AT&T said on Monday it had dropped its bid for T-Mobile USA, bowing to fierce regulatory opposition and leaving both companies scrambling for alternatives,” Sheahan reports. “T-Mobile USA ‘is just crying out for a merger with Sprint. That’s the only long-term solution for Deutsche Telekom,’ Will Draper, head of telecoms research at Espirito Santo, said.”
Sheahan reports, “T-Mobile USA, a growth engine in its early days but now a run-down asset, is badly lacking in the spectrum it needs to build a network capable of handling the vast data volumes that U.S. consumers and businesses use on smartphones. Bleeding money and losing customers, it ranks fourth among U.S. carriers behind AT&T, Verizon and Sprint.”
Read more in the full article here.
Sprint won’t buy up an incopatable network.
They did with the Nextel merger. And those two disparate technologies, CDMA a iDen, are horrible for Sprint. So perhaps you’re right given the lessons they’ve hopefully learned.
And yet all one reads on forums such as this is that the US & the world need MORE individual competitors. Clearly, T-Mobile cannot stand on its own, folks, so would it be better that it fail completely, rather than merge with AT&T, Sprint, Verizon, or whomever? If I followed this thread correctly in the past couple of weeks, NO ONE wanted the merger with AT&T to happen. So what now? T-Mobile is rusting at the seams and dying, but that’s better than a merger somehow? Hmmm.
Two possibilities:
Deutsche telekom decides to spin T-Mobile off and make it independent. After all, even though it is hemorrhaging subscribers, it is still profitable, which is not all that common for American companies in today’s economy. If it does indeed end up dying, AT&T will in the end get to poach the assets it wanted (presumably, network infrastructure) cheaply.
Alternatively, T-Mobile might get the iPhone (now that the merger is out) and begin regaining customers. At this point, they are the only American GSM pre-paid carrier, not to mention even with their standard (two-year) plans, they still offer better deals than the big two.
Make that the cheapest American GSM pre-paid carrier (AT&T has their GoPhone pre-paid plans too, but they are much more expensive).
Or…..maybe AT&T’s premature “we bought T-mobile” national ad campaign severely hurt T-mobile’s market position as an independent cell phone service.
just my $0.02
This isn’t such a great idea, though it’s been flung around for some time. Yes, Sprint did buy Nextel, and that’s considered to have been one of the worst deals made. It’s one of the major reasons Sprint is in trouble today (other than the Clearwire deal).
I can’t think of a singe good reason why Sprint should buy T-Mobile, but several why they shouldn’t. One major one is that they can’t afford it.
Especially the Clearwire deal.
Didn’t they (AT&T and T-Mobile) just say that they have made an favorable roaming deal? I can’t remember where I did see that…
Yes, I read that too … either in the WSJ or NY Times.
Theoretically, it is possible to accomplish almost as much with long-term contracts and partnerships as with mergers. For that reason, there could be antitrust scrutiny of any deals between T-Mobile and AT&T.
One advantage of a contract over a merger is the greater ability of two ‘independent’ companies to practice price discrimination (selling the same service at two different prices) without angering customers of the ‘premium’ service.
The real question is why would Sprint bother? Sprint would have to take over a 3G network with technology that it doesn’t support now, and will be phased out within 4-5 years. The only added benefit is the customer base, but that is shrinking and Sprint would have to try to convince those people to stay and buy Sprint-compatible devices.
A better option would be for a regional company like US Cellular to step up into the big time and buy/merge with T-Mobile, but that may be financially undoable.
Sprint is up to its neck in debt. All its dough is going to pay off old debt and roll out LTE in the next year (or later). After the Nextel debacle (which resulted in the company taking a $26 billion write-off of Nextel’s goodwill value), thete is no way the execs would be so foolish ascto make a bid for a carrier running GSM.
Not to mention its debt to Apple for it’s deal to carry iPhones. Plus, Sprint can’t buy T-Mobile and the government shouldn’t let Sprint buy either… what were all those people saying about a merger with ATT over the past ten months?!…
There’s too many wireless carriers. The government had always screwed up competition. Let the weak fail or merge.
Maybe Apple could buy T-Mobile. I think Steve Jobs wanted to be a carrier at one point.
To bad about T-mobile- I’ve been a customer for about 4 years now, and I’ve never had dropped calls and coverage has been no problem – coast to coast Seattle, Portland Sand Diego, San Francisco, DC, NY city. Everywhere I’ve been on business. I don’t have data, so it breaks down to about $25 per month per family member. Been very happy. Bet they could survive if they got the Iphone. Hope they do. best value in Cell service for the low end user.