This deal leaves US number 3 mobile operator Sprint Nextel in a vulnerable position. Reports earlier in March suggested that a merger was being planned between Sprint and T-Mobile USA, but this has come to nothing. Sprint is now left with ageing…
This deal leaves US number 3 mobile operator Sprint Nextel in a vulnerable position.
Reports earlier in March suggested that a merger was being planned between Sprint and T-Mobile USA, but this has come to nothing.
Sprint is now left with ageing technology, a subscriber base that would be less than 40% the potential size of AT&T/T-Mobile USA and the small problem of Clearwire, the struggling WiMAX network provider in which Sprint has a majority stake.
Sprint said in a statement that its strategy “remains unchanged”.
Yet it could well struggle to compete against Verizon Wireless and the new AT&T/T-Mobile, which (according to Sprint’s own estimates) would control almost 80% of the US post-paid market.
Verizon Wireless has dismissed rumours that it would acquire Sprint.
Options left for Sprint include partnerships with other wireless carriers like Leap Wireless or MetroPCS, or alternatively with the satellite/terrestrial venture LightSquared.
But if it does take any of these routes, it will effectively be backing both LTE and WiMAX.
Sprint’s CEO, Dan Hesse, reportedly said earlier in March that Clearwire was involved in every option concerning Sprint’s future, but that it was still undecided how strong the relationship would be with Clearwire compared to other options.
Clearwire’s losses grew last year and long-term it faces a difficult fight against the LTE providers.
The AT&T/T-Mobile USA deal was probably therefore an unwelcome surprise for Sprint, and it will leave the Kansas-based wireless carrier in a difficult position
