Just before the weekend got rolling, the Wall Street Journal dropped yet another of its wireless merger rumor bombs. Apparently, Sprint is working on plans to buy T-Mobile USA. If you think you’ve heard that before, it’s because you’ve definitely heard that before. The situation has changed, but has it changed enough?
One of the main problems with a Sprint/T-Mobile deal in the past has been the incompatible underlying networks, i.e. the GSM/CDMA thing. Now both are moving forward with LTE in earnest that recedes a bit into the background, although it would still be a giant mess to manage even given Sprint’s unfortunately intimate familiarity with such things (think Nextel).
Another difference is in the ownership. With Softbank now firmly holding the reins at Sprint, the situation involves deeper pockets, longer term plans, and more aggressive thoughts in general. Sprint’s past a-bit-too-desperate antics with Clearwire are just that, past. While the longer term strategic situation has evolved only incrementally, the folks supposedly putting together a Sprint/T-Mobile deal would be doing it from a psychologically different place.
But on the other hand, T-Mobile USA is just now starting to have fun. With John Legere and crew basking in the glow of some short term strategic and tactical successes, the price tag isn’t as much of a bargain as it might have been a few quarters ago. The challenges of being #4 and spectrum poor relative to the competition remain, but that edge of desperation is gone for T-Mobile too.
I find it rather unlikely that anything is imminent, rather I think the WSJ is simply re-reporting on a forever ongoing internal option. The bottom line is that Sprint would be grossly negligent if it wasn’t keeping a running analysis on a potential merger with T-Mobile. They’ve certainly been doing it for years now already.
The nearness of that plan to the surface will fluctuate over time, and eventually it will pass the threshold and actually make sense. But just because they are always studying it doesn’t mean there is a Spring deadline for any decision at all.
Of course, that hasn’t stopped those who dream of a #3 to properly balance Verizon and AT&T. Nor has it stopped those opposed to further reductions in competition from going on the record against a deal that isn’t even a deal yet. But it’s December and pundits are reaching for material. For that matter, I’d better not throw any stones at glass houses.
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