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Is T-Mobile US Likely To Merge With Another Carrier?

September 17, 2014 - Written By David Steele

The North American ‘phone market is currently very competitive with something of a price war taking place at the moment; Sprint has cut prices to individual customers to $60 a month for unlimited calls, texts and data, which is $20 cheaper than T-Mobile. The mobile virtual network operators, MVNOs, are also very competitively priced. We’ve also seen shared data plan competition. This price war should be good news for customers. One interesting observation from Wall Street, and something echoed across the world, is that unlimited data plans are not considered to be viable long term plans given the expected growth in mobile data network usage. The market is also in a state of flux and conditions can change all of the time: this year we’ll see the AWS-3 auction and next year, an auction for the low frequency airwaves. And T-Mobile USA are in the thick of it.

Wall Street analysts from Jeffries have recently met with T-Mobile USA and have stated that T-Mobile believes the company has a lot of potential options when it comes to mergers and acquisitions. However, it’s believed that T-Mobile would only seek a partner with existing North American spectrum in order to consolidate and strengthen their position. It would also seek “favourable financial terms,” which is the posh way of saying, “a stack of money.” Earlier in the summer, French telecom company Iliad offered $33 a stock for just over half of T-Mobile USA, which was rejected by Deutsche Telekom as not being enough. Dish Network may also be in the running for T-Mobile USA after the results of the AWS-3 spectrum auction, due to start in November, but T-Mobile’s CEO John Legere has recently said that he takes the interest in T-Mobile as flattering and, “I think that will continue.” T-Mobile USA believes that they are playing from a position of strength and have the option to keep it as a strong, independent business or to partner another network or company to add scale.

We need to see what happens following these next two auctions. T-Mobile US clearly believe they’re a viable competitor and the US regulator, the FCC, has already stated that it will favour the smaller networks for the 2015 low frequency auction. But what do our readers think? Would you like to see T-Mobile merging with another business, but could this endanger their uncarrier status? Hit us up in the comments below.