The country’s wireless carrier industry is in for a major stir, as reports confirm that a merger between Sprint and T-Mobile looks like quite the possibility.
Currently, the market is dominated by AT&T and Verizon, while T-Mobile and Sprint rank 3rd and 4th respectively. However, since the prospect of the merger came into play, the stock prices of both the companies have risen.
T-Mobile shares rose 1.3% to $67.22 and Sprint shares saw a rise by 1.1% to $8.16. This is indicative of the benefits that the merger could cause to both the companies.
Earlier this month, a Bloomberg report indicated that Sprint CEO Marcelo Claure had traveled to Washington to lay the groundwork for the merger.
T-Mobile CEO Braxton Carter in reference to the merger said,” There is a very significant value-creation opportunity. It’s not rocket science. We need to buckle down and see if there is a way to check all the boxes and, if there is, we’ll be very interested in turbo-charging. But there has to be significant incremental value creation. If that isn’t there upon doing due diligence, if you can’t get past some large issues, we’re still in a great position with a stand-alone path.”
Sprint CEO Marcelo Claure said a combination of the two would create “a turbocharged maverick that would approach current leaders AT&T and Verizon in scale at JPMorgan’s telecom, media and technology conference.”
This merger seems to be a win-win situation both for the companies as well as for customers. Inter-company price wars have made available to customers great deals on calls and services. The T-Mobile and Sprint merger also promises a great outcome for the customers as this will initiate yet another great war among the top wireless carrier companies.
Deutsch Telekom (T-Mobile’s holding company) and SoftBank (Sprint’s holding company) had engaged in similar talks during mid-2014 but they had to shelf the idea of a merger due to regulatory conflicts. However, both the companies did see a rise in the share prices after President Donald Trump won the elections.
Megha Shah for TechFunnel.com