Sprint and T-Mobile eyeing $32 billion merger

Kate Davidson Jun 5, 2014
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Sprint and T-Mobile eyeing $32 billion merger

Kate Davidson Jun 5, 2014
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Sprint and T-Mobile, the nation’s third and fourth largest wireless phone operators, may have agreed on a pricetag for merging, according to early reports.

Turns out, sometimes three + four = $32 billion.

That’s how much Sprint could pay to acquire T-Mobile, a merger that would continue a wave of telecom and media consolidation. So how would that affect consumers?

Canalys analyst Chris Jones says T-Mobile has attracted millions of customers in the last year, “with an uncarrier strategy: taking away early termination fees, having zero down on a new phone, and having free international roaming.”

Jones says that if Sprint and T-Mobile become a more dominant carrier, those aggressive incentives might go away.

But Angelo Zino, an equity analyst with S&P Capital IQ, thinks a combined Sprint/T-Mobile would be a lot more competitive on pricing, given the economies of scale.

“That’s gonna put additional pressure on both AT&T and Verizon,” he says. “And that bodes well, we think for customers.”

Zino says price competitiveness could help the merger survive the scrutiny of federal regulators, who now have several potential megadeals on their plates. 

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