If it weren't for, umm, other news, Sprint's alliance with Google Voice might have had a pretty nice impact this morning. They are letting customers use their Sprint mobile number as their Google Voice number, which adds some nice functionality right off the bat. They are also preloading Google Voice's Android app onto the new Nexus S 4G, also announced today. But it will all be drowned out by the big merger news. The announcement of the proposed buyout of T-Mobile USA by AT&T has far-reaching implications, but the most immediate of them are neither for AT&T nor Deutsche Telecom, but rather for Sprint. For AT&T and Deutsche Telecom, this is just a proposed merger that will take at least a year to actually happen. But for Sprint, it has tangible implications right off the bat.
For several quarters now, Sprint has been publicly hedging its best when it comes to its WiMAX buddy, clwr. The possibility of a Sprint/T-MobileUSA merger was just one possibility that has been floated. Others include a T-Mobile purchase of spectrum from Clearwire, and even a switch to LightSquared which has also been seen as a logical T-Mobile partner. They have used the uncertainty in their plans as leverage over the others involved, but in one fell swoop Sprint has rather fewer options available to it. While the effects may not be immediate for those doing the actual merger, T-Mobile USA will cease to be a major wildcard in other speculations.
Sprint's remaining options include:
- Double down on WiMAX with Clearwire for now, and head for some sort of LTE unification later on if it becomes necessary. That probably means making sure Clearwire gets the funding it needs to continue the buildout. It could even mean a buyout of Clearwire's minority investors.
- Switch plans toward LTE now, spending billions and probably making a partnership with LightSquared, whose future is probably no more clear than Clearwire and whose funding needs are also great.
- Or, endure quarters of speculation over their lack of options.
I don't find the latter two to be too compelling. Hence, I look for a very quick deal between Sprint and Clearwire over those wholesale prices they have been haggling over, followed by some clarity on funding. It's time to stop bickering and get on with it, come what may.
LightSquared just lost some leverage too - T-Mobile USA seemed like a likely partner but they are now off the table. Might they also switch gears and talk to Sprint and Clearwire? Hmmm, perhaps we will see an allergic response to this deal, in which the remaining opposition unifies somehow. LightSquared isn't that far down its own path, and Falcone might still have enough flexibility to switch gears.