Sprint, which was said to have been in negotiations with T-Mobile USA before the proposed deal from AT&T to acquire the carrier, could look to restarting the talks of a merger, as the two beleaguered wireless carriers consider a merger to compete more effectively in a market which is getting increasingly fiercer. The failed attempt by AT&T to take over T-Mobile has given Sprint an opportunity to attempt to acquire the carrier on its own.
The parent company of T-Mobile USA, Deutsche Telekom, has been reported to still be willing to sell off the fourth biggest wireless carrier in the US, and Sprint had been holding talks with the company prior to AT&T’s attempted purchase. Sprint is currently struggling to make its presence felt in a market which is largely dominated by the two biggest carriers in the country, AT&T and Verizon Wireless, who together own as much as 70% of the wireless market. Sprint, which is on the third spot, has recently taken a big gamble by offering the Apple iPhone as a part of its product portfolio; however the move looks to have paid off as the phone registered record sales since opening on the 4th of October.
Sprint, however, still has only a 17% share of the market, and it is very likely that the company wants to improve that position. The company will also stand to benefit with the increase in its spectrum range after the merger with T-Mobile, and its share of the market will also increase to almost 25% of the market, which will make it a much bigger competitor for AT&T and Verizon.
However, the merger of T-Mobile and Sprint still faces many big hurdles. Sprint had taken a huge gamble in acquiring the Apple iPhone and in spite of the high sales of the smartphone it will continue to run at a loss until it recovers its shortage of $5 billion in cash. It is likely that any merger with T-Mobile will be very expensive and the legal hurdles associated with it will also prove to be very costly for the carrier. It is believed that the biggest challenge, however, lies in the incompatible networks of both the carriers, which means that an acquisition will require a conversion of T-Mobile’s network, which, too, will be very expensive.