The rumors that Sprint will make a bid for T-Mobile has been circling for months now. While I think it is likely that the Department of Justice, and to a lesser degree the FCC, will intervene to stop the merger, let's take a look at what is likely to happen if the merger goes through.
A good place to start are the rumors that the new CEO of the merged company will be T-Mobile CEO, John Legere. This in itself is quite natural since Mr. Legere has been very successful exploiting the loot from the failed AT&T/T-Mobile merger as well as the newfound interest in the US market and leeway given by the T-Mobile parent company Deutsche Telekom. Sprint on the other hand has been struggling with poor management and has moved from one disaster to another.
On the network side, T-Mobile has successfully and quickly have been able to transform and upgrade their network to become one of the fastest US 4G networks where T-Mobile has coverage. The Sprint network has been going through never-ending upgrades but still lag their competitors in speed and reach. Recently top Sprint network brass has started to leave the company.
The management failures and poor network of Sprint, in combination with the merger being pushed by the Sprint parent company, Softbank, not Sprint, lead me to the conclusion that things are not looking good for Kansas City if the merger goes through.
I think the most likely outcome is that management of the merged company will basically be run by the existing T-Mobile team, in Bellevue. They have a great track-record and Bellevue is significantly closer to Japan.
I would also forecast that if the merger is approved, the Sprint network will be dismantled and shut down within 24months on a market by market basis. This is how T-Mobile successfully dealt with (albeit much smaller) purchase of Metro PCS. It would also quickly solve the problem with poor past technology choices at Sprint and get rid of their legacy 3G network.
The merged Sprint & T-Mobile will essentially become super T-Mobile while Sprint as we know it today will cease to exist.
Post a Comment