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Assuming that Sprint makes its much-anticipated bid for T-Mobile USA sometime this summer, one of the most difficult decisions the combined company will have to make is what it will call itself.
Calling it “one of the trickier aspects of this would-be merger,” Rich Karpinski, principal analyst with Yankee Group, says there are a lot of factors to consider when deciding on the name of this would-be company. T-Mobile has been riding high – adding 1.3 million new customers last quarter, more than Verizon Wireless and AT&T combined – but there’s a long history associated with the Sprint name.
“Clearly, T-Mobile is on a good run now from a marketing perspective, but Sprint/SoftBank is also the acquirer in the deal, Karpinski noted, commenting specifically on a Fierce Wireless article. “As rumors go, we saw the idea of ‘SoftBank USA’ (named after Sprint’s majority owner) floated recently, which would be a complete reset and quite challenging to execute. Maintaining the momentum behind the T-Mobile brand would make sense, but would be painful and jarring to those on the Sprint campus, including the executive management team, which looks to be facing some significant changes as well.”
It’s been rumored that the new company would be led by T-Mobile CEO John Legere. The latest speculation is that the combined company will go by the T-Mobile name. If the tie-up is rejected by regulators, T-Mobile will supposedly receive $2 billion in compensation as a “breakup fee.” Look for the sale to be worth $32 billion.
Karpinski says that Sprint and T-Mobile also have some major infrastructure issues to work out if they were to merge.
“Any decision is also complicated by the fact that the combination of the Sprint and T-Mobile networks will be anything but simple, with not only CDMA/GSM networks but also different bands of LTE needing to be reconciled in both the short and long term — a reality that will likely impact the consolidation of company and service branding,” Karpinski said.
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