T-Mobile and Sprint have long been the bridesmaids to AT&T and Verizon's bride in the US, as both carriers have struggled to take significant market share away from the top two players. In light of that, there has been speculation and rumors surrounding a combination of Sprint and T-Mobile to create a large enough number three carrier to challenge AT&T and Verizon. Speaking to Reuters this week, T-Mobile chief financial officer Braxton Carter hinted that a merger between the two might not be that bad of an idea.
Though Carter did not say whether or not discussions between Sprint and T-Mobile have already happened, he referred to a potential merger as "the logical ultimate combination." Carter then addressed an audience of investors and said "We think it's not a question of if but when that there's further consolidation in our industry." He did note that regulatory concerns would make a merger between the two carriers difficult. When AT&T tried to purchase T-Mobile in 2011, it was blocked by the government, which decided that the market needed four major national carriers to remain competitive.
"We think it's not a question of if but when that there's further consolidation in our industry."
In the past, T-Mobile has said that four major carriers in the US is not sustainable, and it's very likely that there will only be three major carriers sometime in the future. Carter called Verizon and AT&T's control of the market a "duopoly," since between them, they have the lion's share of mobile subscribers in the US. A strong third carrier would "create a more competitive environment," he said.
Though it hasn't partnered with Sprint just yet, T-Mobile has worked to expand its share of the market. Earlier this year, it closed an acquisition of MetroPCS, one of the largest regional carriers in the country, and it has introduced new rate plans that are designed to attract customers away from AT&T and Verizon. Sprint has been tied up with Japan's Softbank, which agreed to take ownership of the company for $22 billion earlier this year.
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