Will T-Mobile Customers Pay More If Acquired by Sprint?

By Craig Galbraith Comments
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**Editor's Note: Please click here for a recap of the biggest communications mergers in Q1 2014.**

With Sprint widely expected to make a $32 billion bid for T-Mobile official in the coming weeks, one might wonder whether the combined company will offer its customers prices closer to those of Sprint’s or T-Mobile’s.

The average Sprint customer pays about $62 per month, while his counterpart at T-Mobile pays approximately $50, according to Reuters. The type of plans available will also come under scrutiny: The majority of Sprint’s customers remain on two-year, postpaid contracts, while T-Mobile last year adopted a model that eliminates contracts for new customers but also does away with subsidies for new smartphones — costing you more, either upfront or in monthly installments.

Sprint has said it could save more than $6 billion on the operating, network and equipment costs through an acquisition of T-Mobile. But it seems unlikely it would curry favor with T-Mobile customers if their bills were suddenly higher.

"I think [Sprint chairman Masoyoshi Son] realized he's between a rock and a hard place," Reuters quoted MoffettNathanson analysts Craig Moffett as saying. “Sprint’s prices are much too high, but if Sprint cuts prices, its stock will fall."

Sprint has lost more than 2.5 million customers in the last 15 months, but it’s started to stem those losses as it overhauls its wireless network. T-Mobile has been the fastest growing of the big four as of late, adding 1.3 million customers in the first quarter of this year.

Federal regulators will likely be the biggest hurdle in all of this. They put up roadblocks in front of an AT&T-T-Mobile merger a couple of years ago. Sprint might have a better shot because it’s the third-largest wireless operator, and a Sprint-T-Mo tie-up would leave three companies that are roughly the same size in terms of subscriber numbers.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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