Sprint, T-Mobile Merger Rumors – No Pain, No Gain?
German Telekom (NYSE: DT) is in talks with Sprint Nextel (NYSE: S) in T-Mobile USA to sell the device. The words turn a keen interest in Deutsche Telekom, the merged entity would, according to Bloomberg anonymous sources, which broke the story cited. Negotiations were again, back matter, and there is no certainty that an agreement is not reached, will feature articles. Among the main sticking points: a valuation acceptable to both sides of the T-Mobile, who bled to end customers. Last year he lost 56,000 customers in the same period of its competitors, Sprint, AT & T (NYSE: T) and Verizon Wireless expands all. T-Mobile Another option may be considered, the sources said, to buy wireless spectrum to Clearwire (Nasdaq: CLWR). Association of ideas floating.
Neither Sprint nor T-Mobile responded to requests for E-Commerce Times, for comment. With all the uncertainty, the mobile phone market has seized with enthusiasm the news. A merger between Sprint and T-Mobile will be the provider of U.S. States third-and fourth-largest wireless carrier U.S. to produce a monster to compete with Verizon Wireless and AT & T. From this point of the face has a purpose, “said Rob Enderle of Enderle Group E-Commerce Times. T-Mobile and Sprint have been on the market in the United States by Verizon and AT & T defined taken”
A technical problem
The list of reasons why the operation proceeds, but it should end there, so far Enderle. “Together we can have enough mass to compensate for this, but based on different technologies, so that the merger would be ugly and have a change of the enormous costs that need both of his tricks to reduce costs and benefit,” said -. Decide which system will be a problem, said Rob Enderle, he said, the better Sprint coverage, but T-Mobile is the world’s most powerful standard. “Tactically, off T-Mobile – is strategically quite the opposite is equally true, and yet would have to be funded to 4G little jump.” If, after Enderle, would be tactical, “because if the company will not survive, there is no strategic importance in the future.”
Would be “T-Mobile, Sprint all users – but there was a telephone exchange and the need for Sprint is the third option, which were half of the installed base in the T-Mobile loses transition – maybe more. ” Ultimately, says Rob Enderle, is that fusion is not justified with this kind of forecast. The incompatibility of existing networks is a challenge, despite the immediate benefits of a merger could, “said Azita Arvani Arvani Group. “Both Sprint and T-Mobile need to grow their customer base, reduce churn, offer a wide range of mobile devices and provide high-speed network,” said E-Commerce Times.
At first glance, a combination of Sprint / T-Mobile could offer companies the opportunity to benefit from 1) the growing market share and 2) the creation of a single Arvani suggested 4G LTE network. But these points is not very helpful with the problem of providing a wide range of devices to their customers, she says. “Sprint CDMA and iDEN, while T-Mobile GSM and HSPA +. So after going to increase market share does not have the advantage of scale in purchasing power and offers a wide range of devices to their customers quickly , “said Arvani. “It would be a similar reflection on the merger of Sprint and Nextel, she said.” But the combination of the market share of the CDMA network of Sprint Nextel iDEN network and does not create advantages in terms of scale and offer a wide range of devices to their customers. “
On the other side were Arvani The second potential benefit – the creation of a single LTE 4G network – could be a real opportunity. “By combining the resources of the national capital, human and spectrum of Sprint and T-Mobile USA in a single 4G LTE network is a convincing win for both companies,” he continued. “You may be able to make it faster.” This makes it a little optimistic on the outcome of a merger if it still harbors reservations. “In general, when the merger of Sprint and T-Mobile USA, which still have to work very hard on growing their customer base, the rotation, and offers a wide range of mobile devices,” said Arvani. “These problems are not simple to combine the short term. Can be even more difficult trying to manage incompatible networks.” If they can keep their eyse in the price, which concluded – a 4G LTE network – that could help clear obstacles and subscriber equipment.
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