Sprint is reportedly eyeing the fourth largest U.S. carrier, T-Mobile, in an attempt to acquire a stronger user base in the shrinking wireless carrier market in America, sources reveal to Wall Street Journal.
The wireless telecom industry in America is limited to four national players, Verizon, AT&T, Sprint and T-Mobile. A latest report from the Wall Street Journal speculates that the wireless carrier market is about to whittle down the wireless carrier competition in the U.S. after sources have revealed that Sprint is working on a bid to purchase rival T-Mobile. That will leave customers with a choice of three major carriers in the U.S. for their mobile plans.
While there has been no official word from either of the concerned carriers, sources reveal that Sprint could make its move to acquire T-Mobile in the first half of 2014. The merger might face some hurdle from the Federal Communications Commission. The Justice Department turned down AT&T's attempt to acquire T-Mobile two years ago, which is against FCC's plans of retaining as many competitors as possible in the market for cheaper rates. Sprint's possible attempt will go under strong scrutiny as the authorities fear that the deal will push up prices and lack of competition will force consumers to go with the available options.
The Japanese telecom giant Softbank acquired Sprint in a deal worth $21.6 billion earlier this year. According to WSJ (via USA Today), Sprint's bid to purchase T-Mobile could be worth more than $20 billion.
The T-Mobile acquisition will give a boost to Sprint user-base, which has been losing its customers. Since both the companies are working on expanding the 4G LTE network in the U.S., the merger can work for the benefit of its users with a reliable network and faster data speed. Despite the merger, Verizon will stay on top of the charts with a 101.2 million subscriber base (till October). T-Mobile and Sprint user-base will increase to about 53 million contract subscribers.
T-Mobile has been growing in recent months. Several new initiatives are attracting customers to join the carrier with its cheaper plans. Recently, T-Mobile stopped charging its customers for premium messages, eliminated international roaming fees and offered new plans without requiring customers to sign multi-year contracts. These methods are being adapted by other carriers, which is a sign of healthy competition resulting in favor of consumers.
