Sprint, T-Mobile resume merger discussions

Gregory Warner and Jeremy Hobson Mar 9, 2011

Sprint, T-Mobile resume merger discussions

Gregory Warner and Jeremy Hobson Mar 9, 2011


JEREMY HOBSON: Sprint and T-Mobile are reportedly talking about a merger. They currently lag behind their larger competitors, AT&T and Verizon. T-Mobile and Sprint stock jumped 4 percent yesterday on rumors of a merger. So what would all this mean for us cell phone users?

Let’s bring in Scott Cleland, a telecom analyst with the Precursor consulting group. Good morning.

SCOTT CLELAND: Good morning.

HOBSON: So give us the basics, why would it help these two companies to get together?

CLELAND: Well, there are two big players, AT&T and Verizon. And Sprint and T-Mobile are number three and four. The logic behind this is if you combined T-Mobile and Sprint, they would have more resources in order to provide more to consumers. They’d be able to invest more in their network, and be able to get the iPhone and other top products.

HOBSON: Is it all about the iPhone?

CLELAND: I wouldn’t say all about the iPhone. I think it’s actually about consolidating to have the resources and investment in order to sufficiently compete with AT&T and Verizon.

HOBSON: How would consumers feel a joint Sprint and T-Mobile in the landscape of cellphone service?

CLELAND: Well I think you know, long term, they would be getting more spectrum, they would be getting more resources and so I think consumers with both T-Mobile and Sprint long-term would benefit greatly.

HOBSON: What about Verizon and AT&T customers?

CLELAND: They’re going to benefit from, you know, a tougher competitor as well. We have more competition in wireless than almost any country in the world, and some people may look at this and say you know, “Is this going to reduce competition?” This is a very heavy investment industry. And you have to have the spectrum and you have to have the infrastructure and the resources to provide a quality service and product. And I think combining makes a ton of sense.

HOBSON: Scott Cleland, a telecom analyst with the Precursor. Thanks so much.

CLELAND: Thank you.


JEREMY HOBSON: Sprint and T-Mobile — the third and fourth largest cell phone companies in the U.S. — are reportedly talking about a merger. It’s not confirmed yet but T-Mobile and Sprint stock jumped 4 percent yesterday on the rumors.

Let’s get the details now from Marketplace’s Gregory Warner. He’s with us live. Good morning.

GREGORY WARNER: Good morning.

HOBSON: What do we know?

WARNER: Well, we’ve heard these rumors for a while about this merger, but what’s changed now is that in tough times, Sprint has managed to hang on to its customers and T-Mobile has been loosing them. So in the past talks of a merger didn’t progress because the companies couldn’t agree on who was buying whom. Now it’s more clear that Sprint is buying — if T-Mobile can agree on a price. And of course a combined company would have almost as many subscribers as the two big guys — Verizon and AT&T. And then with that bigger base they’d have more weight to pull in going to say Apple, asking to get the iPhone on their network.

HOBSON: It all comes back to the iPhone. Greg, What does this mean for customers?

WARNER: If this merger happened — and it is totally preliminary — but it probably would be bad for customers on price at least. Right now, Sprint and T-Mobile try to undercut each other with cheaper plans because they’re competing for your business. If they’re the same company that incentive goes away. Also if they become one company they’re juggling different technologies, so your phone might be CDMA — my phone might be GSM — that’s a lot of letters. Lot of frustration.

HOBSON: Sure is. Marketplace’s Gregory Warner, thanks.

WARNER: Thanks Jeremy.

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