A Perspective T-Mobile Merger Could Energize Sprint
posted Saturday Feb 18, 2017 by Scott Ertz
Over the past 7 years, one of the stories that just won't die is the possible partnership between T-Mobile and Sprint. In 2010, T-Mobile considered a technology switch, from their existing GSM platform to WiMAX for 4G. They were in talks with Clearwire, the company that was partially-owned by Sprint, and provided Sprint's WiMAX network. At the time, it was suggested that the move would have been intended to make it easier for Sprint and T-Mobile to become one network. In 2013, after acquiring Sprint, SoftBank opened discussions for T-Mobile.
Those discussions ultimately broke down because of the FCC, but not because the parties were uninterested. Today, the environment at the FCC is far less negative than it was 4 years ago, and SoftBank has begun reconsidering their offer. Unfortunately for them, Deutsche Telekom is no longer interested in relinquishing control of T-Mobile, so SoftBank has a new strategy. Instead of offering them a buyout to go away, SoftBank is considering offering them part of Sprint, making the two partners.
As of today, no official offer has been made, nor have any conversations been had of any sort. It turns out that is against federal regulations for participants in an ongoing spectrum auction to have any official contact. That means that SoftBank has through April to put their thoughts together before approaching Deutsche Telekom.
The issue at hand, though, is could a merger between the two networks be a success? Sprint is no stranger to cross-technology mergers, having purchased Nextel in 2005. Sprint used CDMA technology, while Nextel used iDEN technology, which were technologically incompatible. Nextel's fate was a complete shutdown of the iDEN network in 2013. Today, Sprint continues to use CDMA for its voice network and LTE (GSM) for its 4G data network. T-Mobile uses GSM voice and data technologies, leaving the proposed company with 3 different technologies to work with.
Some sort of overall purge would be necessary for the group. Likely, Sprint's CDMA technology would be the technological victim, giving Sprint the ability to bring unlocked devices GSM devices to their customers, as well as a larger variety of phones, which would be a welcomed addition. There would also need to be a brand purge, however. Within the proposed group would be: T-Mobile, Sprint, MetroPCS, Virgin Mobile USA and Boost Mobile.
Obviously, everything is conjecture at this point, as the two companies are not even permitted to discuss the idea until April, but this is a fascinating twist to a nearly decades-old story.