Countless reports have come in over the past few months predicting the possibility of a merger between the third and fourth largest U.S. carriers, Sprint and T-Mobile. So far nothing official has materialized, though it has been reported that Sprint is meeting with regulators to see if they would be open to the idea. The merger would allow them to compete much more effectively against Verizon and AT&T, two of the largest mobile carriers in the U.S. T-Mobile US CFO Braxton Carter has said that the merger isn’t a question of if, “it is a question of when.”
Deutsche Telekom has a majority stake in T-Mobile US and it too is open to the idea of a merger with Sprint. While it has said that there are no issues with running T-Mobile US as a standalone carrier, if an opportunity for consolidation in the U.S. market opens up, Deutsche Telekom has gone on record to say that it would enter the process with “an open mind.”
Carter says that the scale benefits of merging with a third-scale national player with the appropriate business model could be “very competitively enhancing” in the country. He also says that if the government wants to retain competition in this market it must stop Verizon and AT&T from steamrolling everyone else at spectrum auctions, he calls for structural protections to “ensure an adequate distribution of spectrum.”
Rumor has it that regulators are not warming up to the idea of consolidation. Last time someone bid for T-Mobile was back in 2011, AT&T pledged $39 billion only to be shot down by regulators, holding the view that four national carriers are needed to preserve competition.