The Internet is blowing up not only with news of the sale of Apple’s iPhone 5, but also with the speculation that Sprint may be considering a little mischief in the mergers and acquisitions arena. One commentary on Seeking Alpha reports that Sprint CEO Dan Hesse may be considering buying a smaller carrier after the build-out of the company’s 4G LTE network.
Who might be the potential buys? They may include MetroPCS, Leap Wireless, or U.S. Cellular. Of course this is all speculation, but should Sprint make a move to purchase one of these carriers, I would hope that the Federal Communications Commission and the United States Department of Justice would have the good economic sense to let this merger go through.
First, such a move would satisfy the FCC’s alleged preference for competition and the benefits it brings to the consumer. An enlarged Sprint could reach more consumers and with the increased economies of scale, they would be able to serve those consumers at lower costs than with its current network.
Second, with a company like Leap Wireless in its portfolio, Sprint can not only continue providing unlimited data plans to consumers, but has another brand that can extend wireless broadband services into lower income markets. These would mean more consumers adopting wireless broadband and enjoying its benefits of connectivity.
Third, the FCC need not worry about a duopoly remaining in the wireless market after the transaction is completed. Sprint may end up a stronger third alternative to AT&T and Verizon.
But hey; what about T-Mobile? T-Mobile may be out of play simply because T-Mobile runs on a GSM network while Sprint CDMA network. Why incur the additional expense converting T-Mobile over to Sprint’s network when U.S. Cellular, MetroPCS, and Leap Wireless run on CDMA.
Finally, there is no reason for government interference in the making of a market in such an instance. Wireless carriers have naturally been expressing demand for spectrum especially since the introduction of the iPhone In 2007 began the onslaught on spectrum we see today.
Oh well, we’ll stay tuned.