FCC a little more open to a Sprint, T-Mobile merger?

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A report from the Wall Street Journal today states that some commissioners at the FCC aren’t totally against a deal between Sprint and T-Mobile. The deal would see the third and fourth most popular carriers in the States combine and create a much larger carrier, and one which could compete with Verizon and AT&T more effectively.

As you’re all aware, in the past, Tom Wheeler Chairman of the FCC has expressed concerns over any potential merger between T-Mobile and Sprint. Reports written a couple of months back portrayed both the FCC and the Department of Justice as being highly skeptical of any deal. Both have seemingly made it clear that the best way forward is for the U.S. to have four carriers, not 3.

Still, this hasn’t stopped various analysts from putting their spin on a potential deal. One report a little while back pointed to similar moves occurring in Europe and working well. #3 and #4 carriers in a handful of countries over on the other side of the Atlantic have combined to create a much bigger, and more competitive carrier, to great effect. Other analysts focus on longer term projections within the U.S. and state that the two have to merge, or one of them will not survive.

Truth is, as educated as it is, this is all just guess work. There’s a lot of research and planning to do by both SoftBank and the FCC before any bid is put forward, and any decision is reached by the governing bodies. But it’s clear now that the FCC might not be as dead-set against a merger as it seemed previously.

Source: WSJ (subscription req.)

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  • Phone God

    Man if this merger makes it able to finally use my cell in buildings, malls and keep service at the same price then I am all for it

    • TechHog

      That’s going to happen with or without a merger.

  • Thomas Su

    Bring on the competition!

  • Matthew James

    The only ones who would benefit from this merger would be Sprint, as they are pretty much done if it doesn’t happen. Isn’t there more competition with 4 wireless carriers, instead of 3? Maybe I’m missing something here?

    • http://www.androidheadlines.com/ Alexander Maxham

      There is more competition with 4 instead of three, but what Sprint is getting at is that there are two big carriers than two smaller carriers. And they want 3 big carriers. I still don’t want Sprint to buy T-Mobile, Sprint needs to crash and burn by itself.

      • http://rosarynovice.stblogs.com/ Augustine

        Because big carriers contribute big to political campaigns and have big lobbying efforts, while smaller ones don’t.

  • K

    Doubtful DT continues this discussion. The DOJ just sent a letter to the FCC yesterday clarifying its position on the merger. Given that opinion, and the two decisions today re: the spectrum auction and spectrum limits, I highly doubt a merger proceeding without some drastic changes in the proposal. No doubt Mr. Son and Sprint will have lots of thinking to do

    • philyew

      Any links for reports of the DoJ letter to which you refer?

      • K

        http://www.bna.com/doj-backs-spectrum-n17179890495/
        click on the ‘letter’ link. theres a pdf.

        • philyew

          Thanks for that. Interesting, and gratifying, but ultimately the explicit context only relates to the rules framing spectrum auction (i.e. today’s decision regarding the 600MHz auction).

          The term “foreclosure strategy” refers to the damaging effect that the acquisition of newly auctioned spectrum by dominant market leaders can have on smaller competitors.

          How is it that you conclude this clarifies the DoJ’s “position on the merger”?

        • k

          In the letter, it states,
          “Therefore, the Department believes it is essential to maintain vigilance against any lessening of the intensity of competitive forces, or reduction in the number of effective competitors, in the wireless industry.”
          While not explicitly stating Sprint/T-Mobile, it does point to the view by the DOJ that they do not believe in a “reduction…of effective competitors” within the current environment. One could argue Sprint/T-Mobile are non-competitors to AT&T/Verizon. However, based on the previous failed takeover attempt by AT&T for T-Mobile, one could assume that the DOJ does view T-Mobile as a competitor and by reasonable arguments, Sprint. So that would make 4, and the DOJ would not allow a reduction beyond those 4 if its within its power.

        • philyew

          I take your point, but we must beware “weasel words”.

          It could be argued that their use of the term “effective competitors” is actually laying the groundwork for ultimately acknowledging Softbank’s claims about the inability of Sprint to compete without such a merger.

          In other words, the number of larger competitors itself is not important to them unless each one of them can be “effective”.

          Needless to say, without today’s decision, it could very clearly be argued that neither Sprint nor TM could be “effective competitors”. However, even with the FCC vote going the right way, in the long term, Softbank and maybe Deutsche Telekom as well may continue to plead that they are incapable of being “effective competitors” when standing alone.

  • Matt

    I’m all for a merger so long as John Legere is in charge. He seems to “get it.”

  • http://rosarynovice.stblogs.com/ Augustine

    The difference on the other side of the Atlantic is that the populations and areas are much smaller. Proportionally, the US should have not 4 but 20 major carriers.

    And the FCC should stop carving spectrum to sell. Over yonder in Europe, there are only 2 or 3 bands, with multiple licenses for different carriers depending on the region. Since no carrier owns a band all over a country, carriers are thus encouraged to provide generous access to its networks in exchange to have generous access to the networks of others. An European carrier is not worried about building up a huge networks that only it can use. That’s why mobile plans are half and even a third as cheap as in the US over there: more competition and less infra-structure costs.

  • princedannyb

    I thought today was the day that the FCC was voting how to regulate the 600mhz auction.

    • philyew

      They did. See the other article posted here today.

  • sushimane

    Man if this merger actually go through its gonna suck In my opinion. I can’t see and want T-Mobile & Sprint together. Crossing my fingers no meger

  • Omar Boyer

    If That ever happens the first day its announced I will take my 3 tmobile lines to at&t.

    • lzc753

      I will do the same thing, but I will take my 5 Tmo lines to Verizon

      • Mike

        If off to Verizon if this happenes. So it will still be a smaller third as many will leave I imagine. Sprint sucks and Ill pay more to be with Verizon than be with them.

    • KingCobra

      I’ll be taking my 5 lines to AT&T too.

    • TechHog

      I think you should wait to see if it gets approved and who is in control. It’s a long shot, but T-Mobile might be handed the reigns. If not, then I’ll leave too.

      • Vaughn Is Righ

        Happy to see you took your mood stabilizers today. Finally, a not-dramatic response!

        I was looking forward to your usual theatrical antics.

    • http://about.me/daylondeon Deacon

      i too would go to the Deathstar network .. as much as i hate ATT .. i hate Sprint more.

      • Omar Boyer

        Same here I hate att but its prices only service improved a lot its good I know cuz I had em, right now im happy at tmobile but if this ever does happen ill go back to att.

    • http://rosarynovice.stblogs.com/ Augustine

      Anybody has an idea where I might find a plan like or better than the $30 one for about $30? Obviously, I want data, not so much talk time. That’s why I use SIP for the latter.

    • $15454173

      Well, AT@T might even offer for incentives to come over if a merger happens. None of these big business moves is the end of the world. Still just phones.

    • notyourbusiness

      I wouldn’t. I’d rather go with TracFone than give my business to AT&T.

      • Omar Boyer

        I would do the same but I need something that works in mexico tracfone,aio, boost,virgin don’t them prepaid ones dont. I heard metro pcs now allows roaming in mexico not sure gonna have to check up on that.

  • Willie D

    In the free market that all carriers claim to want, there will be three big carriers and one will crash and burn.. Its happenin now, only Sprint now doesn’t like that idea nor wants to be the carrier that isnt the third. Shame they wanted to play the game and now dont like losing.

    • DirkDigg1er

      I don’t think any carrier wants to second or third.

  • philyew

    The shill over at the WSJ speaks and we all start to twitch…again.

    The real news over at the FCC today, however, tells us something which will ultimately prove beneficial in this ongoing saga, I suspect. Since the vote today regarding the 600 MHz auction limits broke on political lines, we can assume that the Softbank takeover will still be opposed by a majority of 3 to 2…as long as one of the Democrat-aligned FCC commissioners maintains some integrity.

    For sure, the two GOP-aligned commissioners can be relied upon to continue looking after the interests of AT&T and Verizon, meaning that only one other commissioner needs to oppose the takeover for it to be rejected by the FCC.

  • Cam Fas

    It’s a shame I really hope this doesn’t happen really debate leaving if sprint jumps on them. I’f it’s allowed I’d really have to wonder who is getting paid off

    • NFMejia

      I doubt it will happen now with the FCC voting in favor of restricting the low band spectrum auction in 2015.

    • DirkDigg1er

      The Republicans also don’t want this to happen. It may affect VZ/T long term profit margin.

  • Stone Cold

    Even if it goes through I am taking a wait and see approach . Am I in favor of this no.

  • JS12

    I think with the FCC voting in favor of spectrum auction restrictions, they’re sending a message that a Sprint/TMO merger isn’t going to happen. If the FCC allows that, then we need to look at how much low frequency spectrum they’ll have combined after everything is set and done. Unless they’ll have much less combined vs Big Red and AT&T.

    • Willie D

      The plot could be for both companies to buy 600Mhz separately then merge, and offload what they don’t need in smaller markets that can be supplemented with the 800Mhz Sprint and 700Mhz TMobile currently hold.

  • Maximus

    What TMO should do is wait untill Sprint deteriorates more and the value drops and then buy them instead.

    • DirkDigg1er

      When do you see that happening? For as long as I can remember 10+ years Sprint and T-mobile has been trading customers every 2-3 years in cycles.

      Also, the timing is perfect NOW just before the 600MHz spectrum auction. The 700MHz auction outcome was a game changer for VZ/T. ATT went from horrible coverage to near Verizon coverage in 2yrs.

  • Vaughn Is Right

    Any moment now until TechHog comes along and vows to publicly burn himself to death in front of his T-Mobile store if it happens… CUE THE HYSTERIA!

    Go ahead, Hog! Entertain us! What’ll it be this time, you swallow a box of nails if it’s approved? HAHAHAHAHAHAHA

  • Willie D

    The real winner in this merger would be AT&T as a large chunk of Sprint customers who left Sprint for TMobile never want to go back to Sprint for any reason at all and would jump at going to AT&T, at least from what I’ve seen in forums and comment posts. AT&T is the most progressive network with GSM, HSPA+ and LTE over Verizon and its locked down CDMA and LTE networks. In this case coverage isnt as in demand as technical standards, device choice (BYOD) and the cost total. AT&T offers more choice and freedom over Verizon in all but rural coverage. And let’s be honest, if you’re with TMobile, its not for their rural coverage so no one can use that excuse that Verizon would be better suited for TMobile users fleeing.

    • Aurizen

      Actually it’ll be Sprint but under T-mobile control. so T-mobile CEO and uncarrier would be apart of the new merger.

    • DirkDigg1er

      If you say so. Like most people left MetroPCS when Tmo purchased them?

      I have an optimistic view on this. For you, the merger can possibly lower your ATT bill. For me, it has an opportunity to surpass ATT sooner. It’s a win win either way.

  • Dann Hessy Parody

    This is a done deal, people. Don’t be naive. Money talks and bullsh!t walks.

    • mingkee

      It’s the end of the World as we know it.

      • JP

        And I feel fine

    • James

      My guess is that you said the same thing when AT&T was trying to buy out T-Mobile.

  • Austin Ferguson

    Honestly if John leads this merger as primary CEO, and they give either hesse a chair or option to retire and GTFO everything will remain and ride on as it does now. If something of that line doesn’t happen, then its pretty much a washed out dream. I’m currently a sprint customer (sadly to a point; only because service for me in my market is pretty damn good) and honestly t-mobile is my only other go-to carrier. With that said I’d love to see both together with combine spectrum + Auction to further there footprint and make a real competitive playing field between the other two pigs.

  • K

    I think it also begs the question: if not a Sprint/T-Mobile, then what? Arguments by both Sprint and T-Mobile execs have stated that a 3 major carrier market is inevitable. It makes sense logically considering the capital expenditure required to create a nation-wide network and continuously seeking to maintain the infrastructure and improve it.
    But what other combinations or actions could occur if a merger doesn’t take place? A DISH/T-Mobile deal could make sense for DT. Offload its investment, Allow DISH/T-Mobile to go head to head with an AT&T/DirecTV combination. Possibly watch Sprint end up being the company that falls by the wayside.
    I’ve only recently started following the wireless industry. It certainly is exciting times.

  • KingCobra

    One thing to note in today’s rules that would set aside some 600 mhz for Sprint/T-Mobile. The FCC has stated that in the event of a merger, then those advantages would be taken away. So then you would have a near $100 Billion Debt Softbank/TMO/Sprint who also holds the majority of all spectrum in the US, trying to bid against the Big 2. In which case VZW/AT&T would then be allowed to gobble up nearly all of the 600mhz, leaving the combined disaster that is TMO/Sprint at a huge disadvantage. All the more reason to hope this merger doesn’t happen.

    • Felipe Bigio

      Ohhh man I couldn’t agree more with u….U are totally right,,,, the FCC should heard the people and favors them upon people’s request to stop this nonsense merger between those 2 companies

  • izick

    If the merger doesn’t go through, I say a joint venture is in order between Softbank and Deutsche Telekom AG where a new company is created, both companies invest in VoLTE and move away from both CDMA/EVDO and GSM/GPRS/EDGE/HSDPA and run a combined next gen LTE network. This joint venture would have to brand itself as a truly next gen, innovative company combining the power of two of the world’s most successful wireless companies under one roof. John Legere’s energy, experience, and reputation would definitely come in handy here.

    The joint venture wouldn’t be a new idea for DT: Deutsche Telekom and Orange in the UK started a joint venture called Everything Everywhere (now just EE). Both Orange and T-Mobile continued to sell devices under their individual brands (maybe this is where the Metro/GoSmart and Virgin/Boost customers go) for quite some time (at least 5-7 years) before being integrated into the combined company.

    • Volker

      I’m glad you posted this, I was just going to ask anyone who might know something about the legalities of this, etc. what’s stopping them from either Coverage sharing like the different companies in India do (is it illegal/anti-competitive?). Second is the joint venture like EE. What would the legalities of the joint venture be? I’d imagine this wouldn’t be their favorite option because they’d have to put the T-Mo brand on the back burner. Unless DT could either license the brand to Sprint or change T-Mobiles DBA name and then using T-Mobile for the new entity. Or maybe they would take a cue from the German operation and simply rename it T with the purple text

    • Wilfredo Martinez

      Virgin Mobile and Boost and all those companies, do not own their own network. Virgin and Boost depend on Sprint, Sprint at anytime can order Virgin Mobile to increase their rates, as well as they can limit priority access to these customers. What this means is that those brands as you call them, aren’t true competitors because they work for the BIG companies. Without T-Mobile neither Virgin or Boost would have been allowed to lower their rates. Let’s face the facts a wireless market dominated by 3 wireless companies is not in the interest of consumers.

    • Wilfredo Martinez

      Also you cannot compare the UK with the U.S they have totally different populations. And the geographical area that needs coverage is way much more different in the U.K than at the U.S.

  • Wilfredo Martinez

    This is ridiculous, the FCC cannot allow this merger. Nor a joint venture or anything like that. In the United States a wireless market consisting of only 3 major wireless companies is not a good idea at all. A 3rd combined company that would be as big as Verizon and as AT&T would only just follow suit and have fixed prices together with Verizon and AT&T, just like in Canada. No matter what Softbank states about starting a price war, consolidation leads to HIGHER bills not lower. Please! Does everyone really believe that Softbank and Deutsche Telekom are doing this in the interest of consumers and out of the kindness of their hearts? How naïve do they think we are? Of course they are not! They admire Verizon’s success, they admire AT&T’s success. They want to be exactly like those companies. They need the SCALE that Softbank son’s talking about in order to achieve what Verizon and AT&T has achieved before. Corporate greed, no interest in consumers, lack of innovation or investment and HIGHER BILLS. This is what they want. The big question is, is this what WE as consumers want? I know I don’t!

  • Wilfredo Martinez

    Also Sprint is a CDMA carrier and T-Mobile is a GSM based carrier, what are they thinking of? Migrating 50 million customers to CDMA or to GSM? Please, this merger is a problem. Also there’s no VoLTE yet in order to migrate all users to LTE technology.

    • sushimane

      Yeah currently they have incompatible tech sprint frequency band. I don’t trust sprint myself they aren’t that good on the exclusion of their strategy. It took them forever to turn off iden network after they killed nextel and promise this and that but nothing to show for. Crossing my fingers that the FCC and doj would keep their words on keeping 4 nationwide carrier then 3. Sooner or later people can’t afford to pay Verizon and att bills anymore. And bam T-Mobile lol

    • Jarobusa

      CDMA is dead even Verizon is moving away from CDMA. Why on earth do you think TMobile / Sprint will move to CDMA? Makes no sense at all. Just more FUD on this board.

  • Martin Martinez

    If this were to happen u can bet that I will go to either AT&T or Verizon I’m happy with tmobile and what they are doing I hope this don’t happen

  • Kenneth Warner

    This would be a great merger they have already said they would make JOHN LEDGER the CEO or the new combined company so sprint would not be in charge T-Mobile would so in a way its like a reverse merger though

    • vrm

      It won’t matter. Even if he is given full reins at sprint, he cannot fix their problems.

      What will more likely happen is that he will be offered CEO position and sprint’s current mgmt will then call the shots after the merger. They will sideline t-mobile mgmt so much that they will leave in frustration.

    • notyourbusiness

      Who the heck is John Ledger???

      • thepanttherlady

        You know, related to Heath. ;)

  • mingkee

    Keep in mind that Sprint is the biggest f’up in the entire communication industry, period. Don’t y’all want to be f’up too?!

  • jdubb
  • jdubb
  • Nearmsp

    The FCC are political hacks sitting in the garb of commissioners who do the bidding of their political handlers on the hill. I thus took out an insurance policy by buying some T-mobile stock when it had dipped.

  • Nearmsp

    so when AT&T wanted to buy T-mobile, these vested interests planted stories that without the merger, T-mobile will go bankrupt. What happened? Same BS being thrown around by “experts”, aka as political hacks.

  • Fred.d

    Why are you people so negative towards this merger ? Saying it’s only gonna help Sprint ?! I think NOT ! In the long run it’s best for both company’s ! They’ll be right on the heels of the big 2 && they’ll have the spectrum too compete !! T-Mobile could pass Sprint , then what ?! Two years till they catch the big 2. Smh support this Merger ! With the request dt are asking for looks like the T-Mobile name && staff will run the new company ! Sounds great

    • vrm

      If it needs to be explained to you, you must work for sprint/softbank/Son

      • Fred.d

        Bahahaha ! Your saying stuff as if you know a lot about Mr.Son ? From what I’ve read he’s merged company’s in japan made them bigger , and created a price war ! Oh and has the fastest lte running ! SOO ? Oh ok

        • Jason Crumbley

          1 – T-Mobile created a price/contract war all by itself.
          Sprint is not needed.
          2 – You didn’t address the accusation.
          3 – Sprint still sucks. What have they done since Softbank bought them out to improve? Nothing. Framly plans have done nothing to help.
          4 – Who cares how fast some company in Japan’s network is? That does nothing for anyone here.
          5 – Many jobs will be lost due to overlap. Many stores will be closed. Neither of those things is good. I would rather pay what I pay now and have people keep their jobs than thousands of people losing their jobs so I can save a dollar.
          6 – Merging with T-Mobile will not fix Sprint’s problems.

        • Fred.d

          I don’t care about Sprints problem being fixed ! I care about T-MOBILES problems being fixed ! Such as having LTE threw out the entire country ! Such as having an owner who doesn’t want too sell every chance they get , such as having an owner who actually wants too invest in the network !

        • Jason Crumbley

          So, if you don’t care if Sprint’s problems get fixed, you want those same problems to continue if the merger happens?
          Sprint doesn’t have LTE across the entire country either.
          What makes you think merging the two will make it happen?
          If Son wanted to invest in the network, he would be doing that now, with Sprint, instead of trying to buy T-Mobile. With all the debt they would take on with buying T-Mobile, they would have no money and no credit to improve anything. It would be a giant pile of poo.

    • mingkee

      Please read the past 10 years of Sprint record to see how the company f’ed itself up.

      • Fred.d

        Oh ok ?! It’s called New Leadership NEW OWNER . Called SoftBank/ Mr.Son

        • mingkee

          Son won’t save Sprint, but a total reconstruction will, and T-Mobile will not involve.

    • Jon

      Apparently you must be an Verizon or AT&T customer or even a Sprint customer because everyone else here can see that T-Mobile would not prosper from a merger with Sprint. Sprint is poorly managed and would probably become the majority shareholder in this proposed merger. I vote to keep T-Mobile out of the hands of Sprint.

      • Fred.d

        Yea I’m A verizon customer but my phone says T-Mobile lte ?!

  • Paul Garrison

    Son may get what he wants, but it will only help AT&T and Verizon. There is a reason Sprint is losing customers.

  • vinnyjr

    Sprint will ruin T-Mobile’s LTE roll out, their CDMA radio frequency will stop and slow down the entire T-Mobile roll out and instead of just Sprint with a lousy and very slow Network we will have T-Mobile with them. This is not good for T-Mobile. The Main T-Mobile company in Europe needs to suck it up and help this part of their flourishing company move forward. T-Mobile has proved their ability to gain customers. If T-Mobile keeps building their LTE and HSPA+ Network as they are doing they will continue to gain many many new customers. Stay away from Sprint, they have had the worst Network for years. They are so bad they just started to throttle data speeds on their very slow Network. I will never be part of that mess. I will always be a loyal T-Mobile customer but if push comes to shove and Sprint some how gets their hands on T-Mobile I will have to go elsewhere.

    • sushimane

      I feel u on sprint. They never had the best track record on deploying anything lte ,wimax the jump program that was a exact copy of jump plan shutting down of the iden network that took them 4 or 5 years and now their shutting down wimax which was a useless. Don’t get me wrong T-Mobile had problems too but they been on point with majority of their networks improvements hspa+42,LTE,jump,paying for etf. So if FCC don’t see this I don’t know what to say. Sprint merge with nextel and completely killed it. Everybody like nextel before the merge.

  • vrm

    Sprint insiders bailing out -
    seekingalpha dot com/article/2222733-sprint-3-different-insiders-have-sold-shares-this-month

  • dontsh00tmesanta

    Someone mustve gotten paid

  • Danny Lewis

    Just let it die already. Son, go buy US Cellular or something.

  • notyourbusiness

    No thank you. We don’t need Sprint or Softbank killing all the progress T-Mobile has made over the past year.

  • Jason Crumbley

    Mergers never create jobs, they get rid of them.
    How many thousands of jobs would be lost because of this merger?
    How many stores would be closed?

    • turtle6988

      Sprint contracted out all there technicians, and Sprint has suffered. Those contractors would initially be kept around to maintain the current Sprint network until it is shut down for T-Mobile’s faster better network. Like Leger said Sprint is a crappie network sitting on a bunch of spectrum or something like that

  • Tyler Kirchman

    The only thing that scares me about this is sprint scraping all T-Mobile’s work for there inferior network. I honestly would take T-Mobiles HSPA+ over any of sprints technology

  • Rick Rudge

    On a completely unrelated issue (or is it?). We’ve also been talking about Dish trying to outbid Sprint. A T & T has made a bid for DirecTV. http://www.reuters.com/article/2014/05/19/us-directv-att-idUSBREA4B0W220140519