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AT&T Doesn't See Sprint/T-Mobile Merger Happening

Article Comments  5  

Jun 18, 2014, 10:53 AM   by Eric M. Zeman   @phonescooper

Randall Stephenson, CEO of AT&T, thinks any proposed merger or acquisition between Sprint and T-Mobile is likely to be shot down by the U.S. government. "The problem as I see it is the way the government shut our deal down. They wrote a complaint and a very specific complaint. You're consolidating the industry from four to three national competitors," said Stephenson in comments made Tuesday. "If you think of Sprint and T-Mobile combining, I struggle to understand how that’s not four going to three." SoftBank CEO Masayoshi Son, who serves as Sprint's Chairman, has been talking to U.S. regulators about a potential tie-up between Sprint and T-Mobile for months. So far regulators have been unenthusiastic about the deal, though they've not said outright that it will be shot down. Son has gained more loan agreements and may make an official offer in the coming months.

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Jun 18, 2014, 11:37 AM

At some point the industry WILL go from 4 to 3

Nobody wants to admit it but there will be consolidation, either through M&A activity or through bankruptcy. There are multiple elephants in the room:

+/- 85% of profits in wireless are earned by VZW/T and the remains are split between TMUS/S and a litany of regional operators. That in itself proves that there are hardly 4 viable competitors. There are 2 national competitors and 2 that are holding on for dear life. Say all you want about customer acquisitions but in a mature market (like the U.S.) the vast majority of those acquisitions are subscribers moving providers at the expense of one another. Sure there are increases in low value data and pre-paid lines, but they aren't moving the financial needle.

TMUS is spending gob...
Your posts are usually insightful. Thanks.
Excellent analysis.

It's clear that Stephenson is trying to poison the well for this deal. He, of course, ignores one very important distinction: a combined T and T-mo would have had a huge market share. A combined S and T-mo would not. Even if reg...
Well written and well said.
I agree. The fact is that Tmobile and Sprint are smaller players and have much easier credit requirements than ATT or VZW. If either Sprint or Tmob go under, a majority of their subs would head to the other instead of dropping a $400 deposit at ATT or...
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