Sprint eyes T-Mobile merger after iPhone addition boosts earnings

Sprint is eyeing a buyout of rival T-Mobile now that both second tier carriers have turned around their finances by belatedly adding the iPhone to their offerings. Sprint took the plunge two years ago and has seen a period of growth as a result. But T-Mobile, which added the iPhone last year, went from being a financially bleeding company to a growing one virtually overnight in a single quarter. Both carriers have attempted to downplay the role of Apple’s iPhone devices in their respective turnarounds, to keep shareholders from asking too loudly about why the iPhone wasn’t added to the mix years earlier. But now that Sprint and T-Mobile are both on more sturdy and growth laden ground, their merger still faces a few obstacles.

The most ominous obstacle to a Sprint-T-Mobile merger is the federal government itself, which ruled in 2012 that AT&T wasn’t allowed to acquire T-Mobile due to competitive reasons. Sprint has a much smaller marketshare, so it can make the argument that this is more about the third and fourth string carriers teaming up to try to compete more effectively with the comparatively behemoth AT&T and Verizon. They’ll also have to face other issues including shareholder and just who would be in charge of the newly created company (most likely existing Sprint CEO Dan Hesse) as well as whether or not one of the two brand names would be phased out.

But the fact that Sprint and T-Mobile are healthy enough to even consider a productive merger is largely due to the fact that both added the iPhone in order to stop the bleeding in time, before any more of their customers fled to larger carrier in order to get their hands on one. Just don’t expect the leadership of either company to admit to as much publicly.

Phil Moore

Phil Moore

Phil covers tech for Stabley Times.