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.
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.