It's no longer a secret that Sprint's Chairman, also the Softbank CEO Masayoshi Son, has been trying to put together a bid for buying T-Mobile from Deutsche Telekom. DT has been trying to get out of the US for quite some time, and they almost got out a couple years ago when AT&T was attempting to buy T-Mobile but that failed. Now Sprint is looking to buy them so they can better compete with AT&T and Verizon, who arguably have a duopoly in the US wireless industry. However, the FCC and DOJ aren't keen on having only three wireless carriers in the US. They have stated that they want four. Which is why Softbank/Sprint still hasn't put in a bid for T-Mobile yet.
"We'd like to make a deal, but there are steps and details that we have to work out," Softbank founder and CEO Masayoshi Son stated on the Charlie Rose show earlier this week. Rose stated that the FCC Chairman, Tom Wheeler wants more competition in the wireless industry, thus meaning he doesn't want consolidation. However, Son's response makes a ton of sense, that Sprint and T-Mobile "are two little ones who are not able to fight without enough scale."
A Sprint/T-Mobile merger would turn the market into a "three heavyweight fight" stated Son. "I would like to have the real fight, not a pseudo fight, the real fight." He continued to say "If I can have a real fight, I go in with a more massive price war." The price war we've already been seeing from T-Mobile, has affected AT&T, while Verizon has decided to sit back and watch how it all plays out.
There was a recent study, which we covered, that found Sprint's monthly bill to be second highest in the US following Verizon. The low-down of that study was that Verizon is averaging about $148/month, Sprint at $144/month and T-Mobile is $120/month with T-Mobile being the lowest among carriers. I'm really excited to see a price war between all the carriers, but we know Verizon won't budge until they start losing a good number of customers. Which won't happen because they have the best network, still. But a price war is something all consumers can get behind. Right?