Sprint is reportedly working with a bid for T-Mobile for $20 billion. While it is still uncertain whether the regulators will approve it, the investors expressed their full support on the merger of the No. 3 and No.4 carriers in the U.S.
The Wall Street Journal reports that the merger may happen first half of 2014 which aims to compete with Verizon Wireless and AT&T. Questions about the possibility of the regulators approving the merger was raised as it previously said that it preferred to have four carriers in the wireless market.
The merger has been discussed years ago but Sprint canceled it because of the cost and the varying technology. AT&T attempted to takeover T-Mobile in 2011 but was disapproved by the regulators reasoning it may hurt the competition in the market.
Analysts gave mixed reactions on the Sprint, T-Mobile merger. Some told WSJ that Sprint has a chance of closing the deal but others said it is very low. However, the decisions will all goes down to Softbank chief executive Masayoshi Son. The Japanese tech company owns 80 percent of Sprint and is very interested in expanding its presence in the U.S through this merger.
Analysts say that the merger would allow both companies to reduce their operating costs by billions and become a stronger competitor for the No. 1 and No. 2 carriers. However, it is uncertain whether it will be favorable for the customers. Yes, the two companies have the same technology but they have different cultures.
Columbia Law professor Tim Wu told the Washington Post, “Consumers had been conditioned to expect inconveniences like early termination fees, overage charges, and locked phones for years, until T-Mobile came along and ditched a lot of them. If Sprint bought T-Mobile, it's not at all clear its mavericky ethos would survive the clash of corporate cultures; a strengthened third-place competitor might just play the same game as the two majors.”
