Sprint and T-Mobile need to merge

For the past few months SoftBank CEO, Masayoshi Son has purportedly been contemplating a move to buy out Deutsche Telekom’s controlling stake in T-Mobile U.S.  Things have gone a little quiet on that front in recent times. And it’s no surprise since both the FCC and DoJ have expressed concerns over any merger between major U.S. carriers. They want four network operators. Not three. Both agree that a merger between Sprint and T-Mobile will be bad for the consumer. But, a group of analysts released a report saying it’d be worse in the long run if they don’t merge. At least, it will be for one of them.

Analysis undertaken by New Street Research suggests that if they want to compete effectively with AT&T and Verizon, they need to merge. What’s more, after looking at various examples abroad of carriers merging, it can result in lower prices for consumers. In Austria, Greece and The Netherlands, 4 nationwide carriers became 3 as two merged. Average pricing dropped between 15-40 percent following the merger in those instances.

To add further strength to their report, they also believe that the two carriers (Sprint and T-Mo) – as they stand – need to make a lot of money to get ahead, and that they’ll need to invest heavily in spectrum. In something of a damning report, the analysis concludes that the market simply can’t support both carriers independently. But together, they could both live on.

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