Sprint Mobile? A bad idea that isn’t likely to happen anyway

The Wall Street Journal dropped something of a bomb late this (Friday!) afternoon with a report that Sprint is “working toward a possible bid” for T-Mobile in a move that would marry the nation’s third- and fourth-largest carriers. The move could come in the first half of 2014, according to the Journal, and a deal could fetch more than $20 billion depending on the size of the stake. The story is based on unnamed “people familiar with the matter.”

Predictably, reactions from analysts and tech journos have been all over the place. Jan Dawson (who knows this industry well) argues that the tie-up makes sense on several levels: The increased scale of the combined companies would help them compete better with Verizon and AT&T, which have become dominant; T-Mobile’s recent disruption essentially amounts to an unsustainable price war; and Sprint continues to lose ground. Meanwhile, PCMag.com’s Sascha Segan (who also knows his stuff) argues compellingly that a takeover would spell the end of T-Mobile’s disruptive ways as Softbank takes the helm, and that a market dominated by three major carriers simply can’t be very competitive.

I’m inclined to side with Segan here: T-Mobile is adding subscribers and cutting losses, and I think its recent streak of disruption — which is already benefiting consumers — can continue. And while it’s true Sprint has struggled mightily, it can finally move forward with its Nextel network in the rear-view mirror and Softbank’s money in the bank. More importantly, though, I think we won’t have a chance to find out: I think federal regulators are very likely to put the kibosh on any tie-up between tier-one carriers, even if that would seem to “level” the playing field with three dominant carriers.

Relevant Analyst
Colin Gibbs

Colin Gibbs

Mobile Curator Gigaom Network

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