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Sprint has made no secret of its designs on its smaller rival, T-Mobile. And today, there were multiple reports of a tentative deal valued at around $32 billion. Sprint chairman, Masayoshi Son, has said a deal would make it possible for Sprint to offer more competition in high-speed Internet. But as NPR's Yuki Noguchi reports, there are still plenty of obstacles to the proposed takeover.
YUKI NOGUCHI, BYLINE: Since before Son's company, Softbank, took a majority stake in Sprint, he's made no bones about how he wants to go big in the U.S. market. And in an interview on The Charlie Rose Show in March, he said T-Mobile was part of his grand plan.
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MASAYOSHI SON: If I can't have a real fight, I go in more massive price war - right? - the technology war.
CHARLIE ROSE: That's your pattern. When you get a stake hold, you undersell everybody.
SON: Yes. Yes.
ROSE: You're willing to postpone profits in order to gain market share.
SON: Exactly.
NOGUCHI: But antitrust regulators and the chairman of the Federal Communications Commission have signaled they do not want the number of major phone operators to drop down from four to three. Three years ago, they blocked AT&T from buying T-Mobile. But Mark Cooper says this deal is different. Cooper is director of research at the advocacy group Consumer Federation of America, and points out this deal would merge the smallest of the wireless carriers, which, combined, would roughly compare to their next biggest rival.
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MARK COOPER: And so the antitrust officials have to ask themselves, is a bigger, stronger number three better for competition?
SON: Earlier this year, Comcast announced plans to buy Time Warner Cable. And AT&T intends to acquire satellite TV provider, Direct TV. Cooper says, with so many big merger deals to consider, regulators will be forced to think about what sort of market they want to end up with, and how many big firms are needed to preserve a healthy level of competition. The answer to that question will go a long way toward determining whether Sprint and T-Mobile will end up together. Yuki Noguchi. NPR News, Washington. Transcript provided by NPR, Copyright NPR.
