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Sprint, T-Mobile Merger, And Metro PCS, Facing Anti-Trust… What About AT&T?

Sprint, T-Mobile Merger, And Metro PCS, Facing Anti-Trust... What About AT&T?

The Sprint, T-Mobile merger that is being proposed is likely to face opposition from the government due to ant-trust laws. But T-Mobile’s Metro PCS acquisition is still underway, and you have to wonder what that’d mean for AT&T and AIO.

As previously reported by The Inquisitr, earlier this year T-Mobile began moving to the contract-free business model, which made perfect sense considering the acquisition of Metro PCS, which has never been contract based (although, Metro PCS can offer third party loans for acquiring the most expensive phones like the Samsung Galaxy S4).

According to reports, Sprint is supposedly considering making a bid for T-Mobile some time in the middle of 2014, but had not made a final decision. And this is not exactly a new idea since Sprint supposedly been mulling this option for years. But these same reports are at once saying US Federal regulators would move to block such a Sprint, T-Mobile merger.

So just how likely are these rumors? Neither company has commented on the proposed merger, but the Federal government already blocked AT&T from buying T-Mobile for $39 billion with the argument being that the US needs at least four major carriers. And consumer advocate Free Press would agree the Sprint, T-Mobile merger is a bad idea:

“The public doesn’t need fewer competitors and fewer choices – not when the wireless market already has so little competition. The public will get nothing good out of this deal.”

At the same time, let’s put this proposed deal in perspective. Sprint and T-Mobile would have a combined 53 million subscribers, while Verizon already has 95 million and AT&T has 72 million. If anything, a T-Mobile, Sprint merger sounds like playing catch up.

And an anti-trust lawsuit by the government might seem like playing favorites considering AT&T is being allowed to purchase Cricket, which would add millions of subscribers. The ironic part is that AT&T just launched AIO to compete with no-contract brands like T-Mobile, but now all those stores are going to be converted to the Cricket wireless brand.

Still, in the long run there’s also the technical issues facing any proposed Sprint, T-Mobile merger. Sprint is CDMA based. T-Mobile is GSM, and they’re actually slowly forcing Metro PCS customers to switch to GSM phones over the long term, with the idea to cut off CDMA functionality within several years. Considering that the majority of the world uses GSM, it’s possible Sprint would find itself needing to switch to GSM as well. Or there’s the possibility they may just ask smartphone companies to start producing combined CDMA/GSM phones.

Do you think a Sprint, T-Mobile merger is a good or bad idea?

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3 Responses to “Sprint, T-Mobile Merger, And Metro PCS, Facing Anti-Trust… What About AT&T?”

  1. Zabie Sahial

    I don't like the idea of Sprint potentially buying T-Mobile, in the public eye the accusation would look more attractive if it was the other way around with T-Mobile buying Sprint.

    Even though Sprint holds a bigger marketshare the idea of Verizon/ATT/Sprint doesn't look as good as Verizon/ATT/T-Mobile…. They've built a great brand with trendy stores and innovating phones plans from the traditional 2 year contract that other companies are starting to follow..

  2. Ed Would

    As long as the heads of all the big players can meet and agree to secretly fix prices without getting caught, the market will be nothing more than what the big players choose it to be. The more competition, the less likely that a tight circle of co-conspirators could be created for the purpose of secretly fixing prices. Industries tend to evolve into a orientation that consists of 3 large players and possibly some smaller, niche players that don't influence much. Three large players is the most profitable industry scenario for the largest three as well. That according to a business research paper that came out awhile back.

    Is 3 the magic number because it's the most stable number of ceo's engaging in illegal behavior? If one wants to back out, you have two against the one. I dunno.