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Now that T-Mobile (TMUS) and Sprint (S) have called off their merger talks, what’s next? How will it impact them, and giants like Verizon (VZ) Wireless and AT&T (T) Mobility and other smaller wireless players like Comcast (CMCSA) Xfinity Mobile, Charter (CHTR) wireless, Google (GOOGL) Project Fi and others?
Both Sprint and T-Mobile wanted the merger, but for different reasons. Both wanted it for growth. Sprint needed it. T-Mobile just wanted it, mainly to get their hands on spectrum and of course customers.
So, a merger would have been good for both. However, now this merger dance is over. Both T-Mobile and Sprint have honorably bowed out in a surprisingly quiet and respectful way. Let’s hope that continues. Now, let’s take a closer look at what happens next.
Masayoshi Son Wanted to Acquire Both Sprint and T-Mobile
Several years ago, Masayoshi Son of Softbank acquired the majority of Sprint. He also wanted to acquire T-Mobile next, but the US Government made it clear that would not happen. So, growth would have to come the old-fashioned way.
Son chose Marcelo Claure as new Sprint CEO. They have both put forth an incredible effort to transform the company. To show growth. And they have made progress, although slower than they want.
However, since the Presidential election there have been renewed rumors about a Sprint and T-Mobile merger. Remember when Masayoshi Son got together with Donald Trump after the election, but before he took office? The path seemed clearer than ever. Now if he could just get together with T-Mobile. Unfortunately, that never happened, so we’ll never know what the government would have done.
John Legere Rescued T-Mobile
T-Mobile was struggling over the last decade as well. It was in trouble. They brought in John Legere as CEO and he has spent the last five years transforming the company and in fact rapidly growing it. Legere punched his way onto the scene with language that would make any CEO’s mother blush. He picked on AT&T Mobility, Verizon Wireless and Sprint. He took on the world. But during all that time, he was growing the company.
He has been incredibly successful, so his unorthodox way works for him and for T-Mobile. I would say the reason for T-Mobile success is John Legere, period.
If Legere ever leaves, I wonder what will happen to the company? He has done a great job and T-Mobile is showing strong growth, even without the kind of spectrum they want.
What’s Next for T-Mobile and Sprint?
So, what’s next? I see T-Mobile continuing on its growth path. They still need to get their hands on more wireless spectrum, but that has not stopped them so far and I don’t think it will stop them going forward either. They will remain in rapid growth mode thanks to Legere.
Sprint will continue on the same growth path they have been on as well. However, I do see Sprint partnering with other companies interested in wireless. And here are plenty. Look at what’s happening in the marketplace in just the last year or two. Google Project Fi, Comcast Xfinity Wireless and Charter will enter wireless next year. This shows there are many companies interested in wireless to grow.
Sprint, Altice Working Together
Yesterday, before the echo’s died of Sprint, T-Mobile merger being called off, Sprint and Altice announced a partnership. Altice, the cable television company would re-sell Sprint wireless services. And Sprint would get an improved network with Altice cable network. Someday I wouldn’t be surprised to hear about Sprint selling wireless TV or mobile TV like AT&T Mobility does.
Sprint has plenty of spectrum holdings. That’s one reason T-Mobile wanted the merger. With that much juice, you would think they would be growing like crazy. So, why aren’t they? If we pull the camera back we could ask that same question for the last few decades. Sprint is a great company, but they just can’t seem to get the engine revved up for the race.
Sprint has other options as well. If you recall, they spoke with Comcast and Charter earlier this year. That was exciting and I thought something may come from it. But nothing happened. Now, there is word that Sprint is talking with Charter. Perhaps the same kind of deal we see with Altice.
So, bottom line, Sprint still has plenty of spectrum and could still be a great partner like with Altice. Maybe for Charter. Maybe for Comcast. Maybe for Google Project Fi, which already is an MVNO reselling both Sprint and T-Mobile.
Wireless will continue to grow and expand into industry after industry. Wireless is still one of the big growth engines of all time. Wireless has grown and changed, time and time again over the last few decades. That change wave and growth wave will continue.
With that said, there are many companies who could use all that spectrum. So, I think Sprint will eventually get together with one or more of them.
What’s Next for AT&T Mobility, Verizon Wireless
As for AT&T Mobility and Verizon Wireless, I don’t see this Sprint, T-Mobile merger meltdown harming them or even affecting them at all. The industry will just continue on its same path.
Wireless is changing. Yesterday, wireless was one, big happy industry. All competitors looked alike. Going forward there are different sectors or slices of the pie. I see AT&T and Verizon continuing to compete with each other. They will continue to grow and to change industry after industry.
AT&T will continue to grow through wireless, telephone, Internet, smart house, pay TV meaning at home, in the office, over the wireless network and more. Verizon will continue to grow through wireless and their Oath, which combines Yahoo, AOL and more.
What’s Next for T-Mobile, Sprint, Xfinity Mobile, Charter Wireless, Google Project Fi
T-Mobile and Sprint will remain on the wireless only side of the fence. They will continue to grow. T-Mobile faster than Sprint, but both will continue to grow.
Comcast Xfinity Mobile, Charter wireless, Google Project Fi and others will continue to enter and transform the wireless space in their way. They don’t seem to be interested in competing head to head with the wireless players. So, I see companies like AT&T and Verizon untouched. Instead, they offer wireless as an additional service for their existing customers.
The question I am interested in seeing is whether the volatile language will be toned down now that the players like John Legere, Marcelo Claure and Masayoshi Son have all had the chance to get to know each other a little better. A quieter world would not be as interesting to follow, but it would be more respectful. We can only hope!
Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at [email protected]. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.