Sprint let slip to the Wall Street Journal that it's been working on a deal to acquire T-Mobile, which would bring the number of major U.S. wireless carriers down to three. However, this might also create a credible competitor for market behemoths AT&T and Verizon.
Analyst Craig Moffett says that by leaking the story Sprint was "sending up a trial balloon" to see how T-Mobile and the regulatory communities would respond to such a deal. The DOJ and FCC would have to approve, and there's ample reason to believe they might not.
Moffett believes all the wireless companies would benefit from a merger, and for a simple reason. "A Sprint/T-Mobile deal would also be good news for Verizon and AT&T . . . After all, industry consolidation is almost always good news for the industry."
Analysts say a combined Sprint and T-Mobile would still be only about three quarters the size (in revenues) of either of the two market leaders, AT&T and Verizon. It would give the combined company 53 million subscribers, compared with AT&T's 72 million and Verizon's 95 million.
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