T-Mobile strategy could hinder Sprint deal

first_img Related Previous Articleفي خطابه الرئيسي بمعرض المستهلكين مدير سوني يؤكد على الحاجة إلى عامل “الإذهال”Next ArticleBlackPhone promises secure smartphone Tim Ferguson Deutsche Telekom, SoftBank tipped for T-Mobile trade Author AddThis Sharing ButtonsShare to LinkedInLinkedInLinkedInShare to TwitterTwitterTwitterShare to FacebookFacebookFacebookShare to MoreAddThisMore 15 JAN 2014 Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter… More Read more Home T-Mobile strategy could hinder Sprint deal Amazon reels in MGM Tags RegulatorySprintT-Mobile US Any potential deal for Sprint to acquire T-Mobile US could face regulatory opposition due to the competition being created by the pricing strategy of the smaller operator.It was reported in December that Sprint, the third-largest US operator, was mulling a bid for T-Mobile US. It was subsequently reported that a number of banks were looking at how to finance a possible bid, suggesting Sprint was seriously considering a move.The deal could be worth more than $20 billion, with sources saying that Sprint could launch a bid in the first half of this year.T-Mobile’s ‘Uncarrier’ strategy, in which customers can upgrade devices more freely, as well as the provision of lower prices than competitors and free international roaming, has seen it gain subscribers from other networks, providing the kind of competition that the US Justice Department has long sought.Speaking at CES in Las Vegas last week, T-Mobile CEO John Legere (pictured) revealed his company attracted 1.65 million net additional customers during the fourth quarter of 2013.AT&T has sought to counter the progress being made by T-Mobile with a promotion that offered T-Mobile subscribers as much as $450 in credits towards devices and services if they switched to the bigger operator.However, a deal in which Sprint acquires T-Mobile could upset the current competitive environment.In a letter sent to the Justice Department and FCC on 7 January, the American Antitrust Institute said T-Mobile would be unlikely to continue its pricing approach if it was acquired by Sprint. It also said combining the companies could be a distraction that weakens their competitiveness.As well as the pricing issue, the fact that a deal for Sprint to buy T-Mobile US would reduce the number of national US mobile operators from four to three is likely to be a cause for concern for regulators.Indeed, an earlier attempt by AT&T to acquire T-Mobile was abandoned in 2011 after the Justice Department blocked the deal, arguing that T-Mobile “places important competitive pressure on its three larger rivals”.It also voiced concern that the reduction to three nationwide operators would reduce competition, leading to higher prices for customers.On the other hand, a merged entity would position Sprint/T-Mobile US as a realistic match for AT&T and Verizon Wireless in the country’s mobile market.The new combination would have approximately 101 million connections against 110 million connections for AT&T and 118 million for Verizon Wireless (GSMA Intelligence, Q4, 2013 figures). T-Mobile US chief predicts market reboundlast_img

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