AH Softbank Sprint T-Mobile Merge 1.1

Now that the Sprint/T-Mobile Merger is Dead, Whats Next for Both Carriers?

August 7, 2014 - Written By Alexander Maxham

It’s been a pretty crazy past couple of days, to say the least. Tuesday night we learned that Sprint was no longer in talks with T-Mobile to purchase their company. We also learned that Sprint was replacing their CEO, Dan Hesse. Then Wednesday morning, we learned that Marcelo Claure is going to take the reigns as the new CEO of Sprint. We also saw the fallout from the announcement Tuesday night, in the stock market. With Sprint’s stock dropping almost 20% in after hours on Tuesday evening. And it still hasn’t really recovered just yet. T-Mobile’s stock did also drop, but not as much as Sprint’s. About a 8% drop. T-Mobile’s CEO John Legere also took to Twitter to “welcome” Sprint’s new CEO, and then bash the company. I’m sure he’s been holding all that stuff in for almost a year now.

So with  that said, what’s next for these two carriers? Well as Kevin Fitchard from GigaOM stated, it’s about the spectrum auction, which is taking place next year. The FCC will be auctioning off the 600MHz spectrum next year, so why is that so important? Well as some of you probably already know, the lower-band spectrum is better for building penetration as well as covering larger areas.  And where both Sprint and T-Mobile mostly have higher-band spectrum, like 1700, 1900, 2500, etc., that’s why their coverage suffers, at least for now. Back in 2008, the government auctioned off the 700MHz spectrum, which AT&T and Verizon picked up (and a few other regional carriers have access to now). And as you can see that really helped out those two, as now they have great networks and are raking in money like crazy due to that.

That is why this spectrum auction is really important for both T-Mobile and Sprint. The number one issue with both of them is coverage. Sprint may have more coverage, but their weak point is data speeds. While T-Mobile is the opposite, great data speeds, but poor coverage. This is why the 600MHz spectrum would really help both of them, and why they need to focus on this auction. T-Mobile has already acquired a bunch of 700MHz spectrum from Verizon and various regional carriers. Sprint is also starting to deploy their 800MHz spectrum they picked up from Nextel all those years ago. Combine the 600MHz with either of those carriers, and you’ve got a drastically improved network. I’m really hoping that either carrier can pick it up, as it could really give Verizon and AT&T a run for their money.