First AT&T, Now Sprint, Mull Over T-Mobile Merger
26 Dec 2011 | Sprint , T-Mobile , att | 0 comments
AT&T's efforts to join forces with T-Mobile have officially ceased after the company realized they had no way around the U.S. Department of Justice's determination to prevent such a deal from taking place. Despite conspiring to sell off 40% of T-Mobile's assets so as to avoid being accused of forming a monopoly, such a scheme could never get off the ground in a practical form. Indeed, pawning off T-Mobile wireless adapter technology and other redundant extras would not have been enough to make a discernible difference. In their attempt to become the numero uno mobile carrier in the United States, AT&T reminded Americans of the realities when it comes to forming monopolistic establishments.
But apparently they did not remind Sprint, who according to a Forbes article are considering going in after T-Mobile themselves. T-Mobile's parent company Deutsche Telekom AG is still vying to sell the thorn in their side, and Sprint is desperate to climb up from dominating only 17% of the American mobile market. Not only that, but Sprint has billions of dollars to make up for after buying the rights from Apple to sell the iPhone. There are plenty of incentives to go around for such a merger to take place, yet how could it succeed if AT&T couldn't get their merger attempt to work?
The answer lies in what makes a monopoly. If Sprint joined forces with T-Mobile, then the new company produced as a result would not take up enough of a percentage of the mobile carrier market to constitute a charge of being a monopoly. Sprint is just too small, and so is T-Mobile. AT&T, however, has far too much control over the American carrier market as they exist today. Add in T-Mobile's share, and they go overboard. In less troublesome, more booming times, the federal government may have presented lax enough regulations regarding the merge. But in an era when big business is held in contempt by the majority of Americans, DOJ officials wasted no time in warning AT&T to back off.
While a potential merger between Sprint and T-Mobile would not be as big as a resulting company between AT&T and T-Mobile, it's not as though such a move would be any easier for them. The DOJ may object to this plan as well, while the Federal Communications Commission may make their own objections as well on account of public outcry at a recurring merger attempt. It's not as though the government wouldn't have the evidence it needed to suggest there's corporate shadiness at play: Sprint sent a legion of lobbyists to Washington DC to fight against the merger between AT&T and T-Mobile.
It makes sense then that Sprint is keeping their cards conspicuously close to their chest during the holiday season. Don't expect their opening move to be made until sometime after the start of the New Year. In the meantime, do your research before getting any family member a phone contract this Christmas.