FCC reportedly skeptical about the idea of a merger between Sprint and T-Mobile

by: Jonathan FeistFebruary 5, 2014


We’ve seen a failed T-Mobile acquisition before, and if early indications hold true, objections from the FCC may stop a new deal as well. On Monday, Sprint chairman Masayoshi Son and CEO Dan Hesse broached the idea of a potential acquisition of T-Mobile with Tom Wheeler, Chairman of the Federal Communications Commission. Despite reportedly admitting that he would keep an open mind, Wheeler was described as being “highly skeptical” of the proposal.

Sprint, who was acquired by Japan’s SoftBank Corp. last year, suggests that the top two wireless carriers, Verizon and AT&T, are so dominant that only by combining themselves, as the third largest carrier, with T-Mobile’s fourth largest carrier rating, could they adequately supply sustainable competition.

In 2011, the Justice Department and the FCC both objected to a $39 billion deal that would have seen AT&T acquire T-Mobile. As with that blocked deal, a merger between Sprint and T-Mobile would be subject to a very hard look by the Justice Department’s antitrust division. In a general statement, “it’s going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of the American consumer” admits William Baer, chief of the Justice Department’s antitrust division, in an interview with the New York Times last week.

We’ll have to wait to see if Sprint actually decides to pursue an official bid for T-Mobile, but for now, we wonder what this combined company would mean for the everyday user. T-Mobile has been a leader in the push for contract free and commitment free services. On the other side, Sprint is a little bit ‘more mature’ of a brand and has been seemingly reluctant to join in the off-contract rate plan race. Without going into too much detail here, I worry that a Sprint controlled T-Mobile service would include rate hikes and steer back away from the currently popular Bring-Your-Own-Device service plan trends. On the flip side, the two carriers’ combined infrastructure could bring users improved coverage of 4G data speeds across the country.

What are your thoughts – can a Sprint/T-Mobile company create better competition against the Big Two and ultimately better plans and service for the user?

  • Duong Duc Ngo

    You need to do some more research when you are writing. Sprint has two type of no contact plan. The Sprint paid as you go and the Framily plan are no contact because you paid full price for your phone. They also finance your phone and so if it is paid off then you are not lock in to a contact.

  • Edward Espinosa

    Sprint Towers are as useless as Manning was in the super bowl. T-mobile has better connections and better interaction between their customers which is an upside. If anything T-Mobile should buy out Sprint and teach them a thing or two about maturity. I personally had all three (excluding AT&T) and for your monies worth I would pick T-Mobile overall.
    1. No contracts
    2.Bringing your phone over
    3. No payment=no termination fees just cancelled services.
    4. LTE Services are more around than Sprint services.
    5.Monthly payments on phones so people who can’t normally afford to buy them have a chance on ownership.
    5. Jump Programs help move to different phones plus insurance provided which is in my opinion is a premium service.
    6. Customer service and support is way better than Sprint in many ways.

    • On a Clear Day

      Sprint is also CDMA meaning you have no flexibility in terms of using the phone with any other carrier or even taking your phone abroad. I would never go with a CDMA network – be it Sprint or Verizon. Period. And unlike some people who put that punctuation at the end of their sentences for the sake of obfuscation never meaning it; I actually mean it.

      Bad deal for consumers from a competition standpoint; bad deal from a hardware freedom standpoint – bad deal and lousy idea.

  • disqus_q6rAEEqvnh

    I think they’ll have to use something like a boxing analogy… that AT&T and Verizon are in a heavier weight class, and Sprint and T-Mo can’t compete separately against that.

    They’ll have to provide something, though, to demonstrate how they can compete effectively together. I haven’t seen that yet.

  • muddy46

    Dont let it happen, FCC! Competition is good.