Sprint has been trying to work out a deal with T-Mobile USA for the past few months. Even though both companies are prepared to go through with a deal, the FCC and other regulation groups in the United States are trying to make sure it doesn’t happen.
Wireless carriers always get hit hard for acquisitions and mergers, in Canada, the government has banned the four major wireless carriers from merging or acquiring new wireless startups, to try and keep competition in the country for consumers.
The United States is more lenient when it comes to acquisitions, but the Sprint and T-Mobile one has apparently run its course. Sprint, now owned by Japanese carrier SoftBank, will not try to persuade regulators any longer.
T-Mobile is currently on an upswing of new customers, moving to T-Mobile’s new deals. At the same time, Sprint is continuing its downward spiral, making us question what T-Mobile USA really felt about the acquisition.
Sprint is the third largest wireless carrier by numbers, T-Mobile sits in fourth. Verizon Wireless and AT&T control a much larger proportion of the market, offering more wireless spectrum around the US than the third and fourth combined.
The acquisition would give Sprint more of a chance against the two wireless giants, but it could lead to even less competition when it comes to price and availability, something the US do not want to see in the mobile industry.
This is the first billion dollar acquisition to fall through, but we still have Comcast and Time Warner Cable, AT&T and DirecTV and the apparent merger between 21st Century Fox and Time Warner to hope will fall through.
Considering Sprint’s current position, trying to find a new CEO for the company and reshaping for their Japanese owners, we can see why the T-Mobile bid might be a loose-end to remove for the new leadership.
Source: WSJ
