Originally published: March 8, 2011
Last updated: March 8, 2011 - 6:00pm
Sprint and T-Mobile are reportedly back at it again, talking about a possible deal that would have Deutsche Telekom selling T-Mobile USA to Sprint in exchange for a stake in the combined company. And if the story wasn't T-Mobile in talks with Sprint it would likely involve one or the other in talks with LightSquared, the startup network backed by Harbinger Capital Partners, Clearwire or even MetroPCS. In fact, you can pretty much shuffle the players around and still find a story about them in some sort of talks or negotiations around spectrum or an outright merger.
The fundamental question here is what can the U.S. market support, both in terms of carriers and in terms of the amount of spectrum available? The FCC clearly isn't worried about Verizon and AT&T, judging by its wireless competition report released last year, but how many more nationwide networks will survive? But ultimately, the latest rumors confirm that the wireless market is evolving quickly and what worked before — four national carriers with a gaggle of smaller competitors — may not work in the future as spectrum becomes more difficult to find and data usage booms. T-Mobile and Sprint may be today’s speculative couple, but this is a high-stakes game with a lot of players running down the clock waiting to see who they will team up with before their cash runs out.
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