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Sprint And T-Mobile Call Off Merger

The long rumored merger between wireless providers Sprint and T-Mobile have come to an end after the two companies made a statement that their talks have come to an end without a deal being reached.

Had the merger succeeded, the combined company would still have been over 130 million U.S. subscribers behind AT&T and Verizon. Now, this simply marks the latest failed attempt to merge the number three and four wireless providers. Sprint, coming in at number four, is now stuck trying to turn things around on their own.

The failure of this merger could be a good thing for consumers though, as all four carriers are going to have to continue to compete for subscribers with continued price cuts. Erik Gordon, a Ross School of Business professor at the University of Michigan, articulated this point when he spoke with Reuters about the merger termination, saying “Consumers are better off without the merger because Sprint and T-Mobile will continue to compete fiercely for budget-conscious customers.”.

John Legere, chief executive of T-Mobile, said in the merger termination statement that the possibility of combining with Sprint was tempting, but “we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding standalone performance and track record.”.

The fact that these two companies went out of their way to make a joint statement regarding the merger does seem to leave the door open for future merger talks, but that is unlikely to happen anytime soon. The Sprint CEO, Marcelo Claure, comments seem to echo that sentiment: “We certainly recognize the benefits of scale through a potential combination.”.

For now the merger is dead, and AT&T, Verizon, Sprint and T-Mobile will continue to duke it out for wireless carrier superiority.


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