Analysts Believe Sprint May Not Need a T-Mobile Merger

Advertisement
Advertisement

It's been widely reported, now, that SoftBank's CEO Masayoshi Son's original plan after purchasing Sprint was to purchase T-Mobile and merge the two together to have a stronger third carrier in the US. This would make it easier to compete with Verizon and AT&T, both of whom are more than twice the size of Sprint and T-Mobile, and also have a lot more spectrum to work with. Regulators, under the Obama Administration had made it clear that they were not in favor of a Sprint/T-Mobile merger, and the deal was abandoned, until a new President took office. But now, analysts believe that Sprint may be just fine on their own, and not need a T-Mobile merger after all.

Now that Trump is the President of the United States, talk of a merger between the two smaller wireless carriers have begun to heat up once again. Although Wells Fargo Analysts believe that Sprint may not need T-Mobile to make a comeback. Under Marcelo Claure's leadership, Sprint has managed to stop losing nearly a million customers each quarter, and actually begin to add more customers than they were losing. They have also worked hard on their network, and are actually getting ready to rollout Gigabit LTE. Something that they showed off in New Orleans earlier this year. Sprint is also in prime position for 5G, with their 2.5GHz spectrum they picked up from the Nextel merger and buying Clearwire all those years ago.

On top of this, T-Mobile has grown vastly since 2014 when Sprint was looking to purchase them from Deutsche Telekom. T-Mobile has overtaken Sprint to become #3, they have also added millions of new customers. Making them much more valuable, and on top of that, Deutsche Telekom is no longer looking to leave the US, in fact they want to remain here. And that's largely because T-Mobile US is their only subsidiary making a profit for them right now. SoftBank already paid $20 billion for Sprint, and would likely have to pay nearly $60 billion or more to get a controlling stake in T-Mobile. Something that is likely not going to happen now, even if the Trump Administration did approve such a merger.

Advertisement