T-Mobile eyes Sprint Nextel
Written on September 16, 2009
NEW YORK — How many wireless carriers do we need? It’s a question that’s popping up again as T-Mobile USA is said to be looking at buying Kansas City-based Sprint Nextel Corp.
Now that most people have a cell phone and the once-heady growth in the industry is slowing, analysts say carriers are going to be looking at buying one another to increase their scale and to avoid competing too much on price.
"The U.S. wireless market is crying out for consolidation," Sanford Bernstein analyst Craig Moffett told investors in a research note Monday. He added that "there are too many cooks in the kitchen."
But consumers have been benefiting from relentless price-cutting on cell phone service in the past few years. So the government may not look kindly on the combinations that reduce competition.
Moffett noted that the Department of Justice has rejected mergers in industries with a similar concentration of players. However, a combined T-Mobile and Sprint could offer more effective competition to AT&T and Verizon, he added.
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