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Sprint CEO Says T-Mobile Merger Creates 'Enormous' Synergies

Sprint CEO Marcelo Claure continues to hype up a merger few consumers actually want. Speaking at a Miami conference and on CNBC this week, Claure stated that his job is to "evaluate all potential options," as the company tries to right the ship in the wake of a disastrous stretch post Nextel merger. T-Mobile is one of them, said the CEO, and "a very important one because of the enormous levels of synergies" that such a deal would provide. Sprint and Softbank have been hyping the merger for much of the year, and entered merger talks with T-Mobile in early May.

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Many consumer advocates worry that merging Sprint and T-Mobile just as T-Mobile begins to have a positive competitive impact on the sector could reverse many of the improvements we've seen in the sector (like the recent return to unlimited data).

And if you look back at the negative impact on consumers of numerous recent M&As (from Frontier's bungled acquisition of Verizon's assets to Charter's clumsy acquisition of Time Warner Cable and Bright House), you should be able to see how those concerns carry some real weight. History makes it very clear that most telecom mergers tend to promise the sky, then only result in higher prices, lost jobs, worse customer service, and more problems than ever.

But Claure argues that, somehow, a T-Mobile and Sprint merger would be different, and by combining to industry "mavericks," the companies can apply more pressure on AT&T and Verizon.

"Imagine if you had a supercharged maverick now going after AT&T and Verizon to stop this duopoly," stated the CEO.

Of course nobody really sees Sprint as a "maverick," and by and large you traditionally see a reduction in competition when you combine two major market competitors. That's a primary reason why Sprint's attempt to acquire T-Mobile was blocked by regulators back in 2014. Claure, and Japanese owner Softbank, have spent much of the year buttering up the Trump administration in the hopes of avoiding the same fate.

Most recommended from 32 comments


Nuggits
join:2008-10-03
Allston, MA

21 recommendations

Nuggits

Member

"Synergies"

Is it just me, or has the word Synergies become a dirty word, much like cap or "data threshold".

battleop
join:2005-09-28
00000

14 recommendations

battleop

Member

Beware of CEOs....

Beware of CEOs that use words like Synergies, NET-NET, WIN-WIN.....

NOCMan
MadMacHatter
Premium Member
join:2004-09-30
Colorado Springs, CO

11 recommendations

NOCMan

Premium Member

Synergy =

Layoffs
Higher Prices
Billing Errors
Inconsistent User Experience
Debt loaded company that will no longer be flexible to compete with the big 2.
axiomatic
join:2006-08-23
Tomball, TX

7 recommendations

axiomatic

Member

Synergies

BINGO! "Synergies" was the last fake business word I needed for BINGO! I win DSLReports BINGO tourney 2017!

n2jtx
join:2001-01-13
Glen Head, NY

3 recommendations

n2jtx

Member

The Magic Touch

The article fails to mention that Sprint somehow turns anything it touches into crap. Son's biggest mistake was giving $17 billion or so to Sprint's existing management. The problem with a merger is that no matter who is officially in charge you will still have the issue of the "barrel of wine". Put a few drops of sewage (Sprint exec's) in a barrel of wine and you have sewage. Put a few drops of wine in a barrel of sewage and you still have sewage. T-Mobile would be reduced to sewage no matter the organizational chart.
rradina
join:2000-08-08
Chesterfield, MO

2 recommendations

rradina

Member

Millions of Synergies...

Every T-Mobile customer...
NYC45
join:2017-02-01

2 recommendations

NYC45

Member

This thing is already on the work

Softbank like the good employer gave Marcelo a seat on their board. Before Marcelo became the CEO he was on the Sprint board due to Massa Son. The sad story will be all the people in middle and lower management will lose their jobs while Marcelo due to his incompetence will be taken care.