If the $39 billion mega-merger between AT&T and T-Mobile USA gets regulatory approval, there could be some serious pressure on Verizon Wireless to make an M&A move of its own. But dont expect the wireless giant to go after Sprint just yet.
Verizon Wireless CEO Daniel Mead wasted no time on Tuesday in getting ahead of the rumors. Mead, whos taking part in the CTIA Wireless event this week in Orlando, was pretty firm in his stance on the issue, telling Reuters that VzW is not interested in Sprint we dont need them.” He went on to say that his company is more interested in being the most profitable wireless operator in the U.S. rather than the largest.
AT&T announced Sunday that it plans to buy T-Mobile USA from Deutsche Telekom, a $39 billion purchase that will make AT&T the largest U.S. wireless operator in terms of subscribers. The move is one of the industrys biggest in years, and, if approved, would drop Verizon Wireless to second place in subscriber numbers. But that doesnt seem to phase Mead, who doesnt think there will be anything blocking the deal as long as AT&T is willing to sell assets in some areas in order to make sure fair competition is preserved.
Despite the likely AT&T-T-Mobile team-up, Verizon Wireless appears to be in a pretty good position right now, so theres little reason to panic. The carrier just broke AT&Ts three-and-a-half year exclusive stranglehold on Apples iPhone, and it expects to see good results as new customers sign up and others leave AT&T to jump on what many consider to be Verizons superior network. Verizon also has more Android offerings than any other U.S. carrier, and Android has been outselling both BlackBerry and the iPhone for several quarters, even taking the overall market-share lead in some estimates.
The same cant be said for Sprint, which is probably more interested in a merger than Verizon is. Sprint currently the No. 3 wireless operator has seen its numbers fall recently. Many observers have been critical of the carriers position in the 4G network race (Sprint relies on WiMAX rather than LTE) and its lack of smartphone options compared to its bigger rivals.