Sprint may need a partner of its own, should AT&T acquire T-Mobile. That could take awhile, but if a deal is needed, Sprint shouldn't look to Verizon.
combination of AT&T and T-Mobile would create by far the world's largest
wireless company and raises the question of what the other two carriers-Verizon
Wireless and Sprint-might do in response.
Verizon CEO Daniel Mead, the answer for his company, at least for now, is to carry
on as planned. During a panel discussion at the CTIA 2011 Wireless
in Orlando, Fla., May 21, Mead said Verizon is in good
shape regardless of what AT&T and T-Mobile do. However, analysts say Sprint
may be more vulnerable, should the $39 billion deal between AT&T and
T-Mobile clear regulatory hurdles.
between Verizon-currently the world's largest carrier-and Sprint seems
unlikely. During the March 21 panel discussion, Verizon's Mead said his company
has no interest in partnering with Sprint. While Verizon has "built a
foundation of great spectrum" through a number of acquisitions, Mead said,
he sees no need to pair up with Sprint in response to AT&T's intentions to
extremely confident of where we're at," Mead said.
In a interview
prior to the panel discussion, he said, "We're not interested in Sprint.
We don't need them."
AT&T deal is approved, it would combine the subscriber bases of the
nation's second- and fourth-largest wireless carriers, knocking Verizon from
the top position. It would also leave Sprint, which ranks third with nearly 50
million customers, holding onto its ranking though knocking it some distance
from Verizon, with its 101 million-plus subscribers. AT&T, with T-Mobile
folded in, could total 130 million subscribers.
Sprint survive?" Consumer Reports asked in a March 21 blog post
. "Probably not ... at least in its
present form and size."
analyst Phillip Redman believes the AT&T deal could push Sprint "to
look at a merger strategy outside the wireless market-cable operators most
likely," he wrote in a March 21 research note.
It could take
more than a year for the AT&T deal to clear various regulatory hurdles, and
will likely hinge on AT&T making a number of concessions, something
Verizon's Mead expects to happen. "Anything can go through if you make
enough concessions," he told Reuters. Until the deal goes through, however,
it will remain unclear what AT&T plans to do with T-Mobile, Lara
Biddiscombe, global account director with analysis firm Kantar Worldpanel U.S.,
told eWEEK. When U.K. carrier Orange purchased T-Mobile U.K., she said, it let T-Mobile
U.K. stand alone.
appear to be what AT&T currently has in mind, however. During the CTIA
panel discussion, AT&T Mobility and Consumer Markets President and CEO
Ralph de la Vega said the carrier's bid for T-Mobile was driven by its need for
additional spectrum. The acquisition, he said, could help "alleviate the
crunch by allowing the networks to be combined and more efficiently utilize
like quite the hearty top-four competitor it once did, should Sprint be worried
about customers jumping ship, as rumors circulate about its need for a
insists that Sprint is still "not an insignificant player." Plus, she
added, for all of carriers' talk and fears about churn, "there's not
actually that much carrier switching. It's quite a hassle, and most people only
do it if they feel they're not getting the level of service they want, or when
one carrier has an exclusive brand, as AT&T did with the Apple
has struggled in the marketplace over the last few years, a turnaround in its
customer service has been a particular point of pride. In February, it
announced its twelfth consecutive quarter of improvement in customer
satisfaction and first-call resolution, and days later, it was named J.D. Power
and Associates' 2011 Customer Service Champions
recently also faced a setback, of sorts, with Verizon Wireless acquiring an
Apple iPhone 4 of its own-a challenge it's fighting against with a rich device
portfolio featuring a number of 4G-enabled smartphones.
not only have a strong device lineup, but they get a lot of value with what we
provide them," Sprint CEO Dan Hesse said during a Feb. 10 financial earnings
call. "I'm not saying there won't be an impact from Verizon getting the iPhone,
but we are doing what we can to make sure our customers stay with us and
continue to have attractive offers out in the marketplace."
Biddiscombe, this might just be enough, even in light of a major competitor
growing significantly larger.
as customer service is good, and network service is good, and they continue to
launch new phone models-things like that that keep their offer fresh," she
told eWEEK, "I don't think they have too much to worry about."