By any measure the proposed merger between Sprint and T-Mobile would have been a bad deal for consumers and employees alike. Reducing the overall number of major competitors from four to three would have dramatically reduced competition in the sector, all but ensuring less pressure than ever on wireless carriers to reduce prices and offer more innovative services. The deal would have also resulted in a significant number of layoffs, as the combined company eliminated countless redundant positions from retail to management.
Still, T-Mobile executives speaking at an investor conference this week sounded almost wistful about the failed deal.
"This team was highly convicted that we had a unique opportunity for value creation with the Sprint deal," T-Mobile CFO Braxton Carter told attendees at the event. "Very conservatively, there were at least $37 billion of hard synergy (in the now-collapsed deal). Mostly in the network. You know, Neville [Ray, T-Mobile’s CTO] and his team for 4-5 months built the most detailed Newco [combined T-Mobile and Sprint] network model--it was a thing of beauty. … But it wasn’t meant to be."
Again, that $37 billion in "hard synergy" ignores the reduced competition and massive number of layoffs the deal would have created. And while T-Mobile and Sprint had begun designing a network integration plan, there's no guarantee that the integration of the companies' notably different network architectures would have gone smoothly in the real world. Integrating support and other back end systems also would have taken both companies' attention away from preparing for fifth generation (5G) network upgrades.
Still, it's "a shame it didn’t happen," the CFO insisted. He said it's not likely that the deal will rise again, given that his proposed "synergies" become less pronounced as the two companies continue to improve their own networks. Still, the CFO stated it's not outside of the realm of possibility that Sprint and T-Mobile will again try to merge down the road (ignoring the fact that the M&A loving Trump admin is likely the best chance they'll have for such a competition-eroding deal).
"Could something happen in the future? You never say never," said Carter.