The Wall Street Journal reports that Sprint has reopened discussions on how to merge with T-Mobile USA as the two slip further away from their far more powerful rivals, Verizon and AT&T. Would be a very interesting move complicated by Sprint’s poor history with mergers. Of course, the big question is: Could SprinT-Mo get the iPhone?
Okay, settle down fanboys. I was only kidding about that last part, but still, I’m sure the fact neither Sprint nor T-Mobile USA has the iPhone isn’t helping their respective situations. Aside from boosting their network muscle, WSJ reports a merger would help Sprint bring down marketing and overhead costs, which are driving them deeper in debt, while T-Mobile USA is in need of spectrum.
One problem blocking talks is an agreement on company valuation with T-Mobile thinking they’re worth more than Sprint is offering. Another factor that needs to be considered is how these two networks would combine since Sprint is CDMA while T-Mobile is GSM. The disaster that was the Sprint Nextel merger (which I believe has been the source of Sprint’s woes since) shows how much damage a merger between two different types of networks can inflict if not handled right. Lot of positive potential here, but also a lot of risk.
Via The Consumerist