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FCC Warming up to the Idea of a Sprint/T-Mobile Merger?

May 16, 2014 - Written By Ray Greer

 

T-Mobile has been shaking things up in the US wireless carrier market. Gaining 2.4 million customers in Q1 2014, though consumers aren’t the only ones who want to purchase a piece of T-Mobile. In fact, AT&T tried to purchase the company back in 2011. At the same time Dish was eyeing the company though AT&T failed and Dish decided not to even attempt it at the time. Now we have been talking about Sprint thinking about a merger and unlike AT&T, Sprint may have some support within the Federal Communications Commission(FCC).

Back in 2011, AT&T announced and failed to purchase T-Mobile. The main reasons they decided to pull the offer off the table was the FCC and the Department of Justice(DOJ). According to the FCC and DOJ, the merger between AT&T and T-Mobile would only cause issues with competition in the wireless communications space. Meaning that consumers would lose out with the number 2 wireless provider merging with the number 4 wireless provider. Needless to say, this failure in merging kept other companies from trying the same-except Sprint.

In late 2013 word broke that Sprint was interested in merging with T-Mobile. Many people speculate that the merger would fail in the same way AT&T’s did due to the FCC and DOJ. However the FCC may not be as against this merger as they were originally thought to be, according to a report in the Wall Street Journal. With that report many different analysts have thrown their calculations into the mix.

According to analysts, wireless companies merging overseas has done great things for their market’s competition. The idea is that if the 3rd and 4th place companies merging only creates one big company with better resources to compete. Compared to the US, that would mean if Sprint and T-Mobile combined their efforts in a fight against Verizon and AT&T, consumers would benefit in the form of better pricing and services. While some analysts are taking a more glass half empty point of view. They feel that if Sprint and T-Mobile don’t merge, then one of them will die off. These analysts are professionals, but still these are just guesses as to what could happen. The important part is that Sprint may have support within the FCC.

Sprint still has a long way to go before they will feel safe enough to start this process officially. Meanwhile, the FCC has a lot to prepare for, and if Sprint does put down an official offer it will be after they have thought of many outcomes. Though Sprint is more than likely very happy to find out that there are some members of the FCC who are in support of the merger.