(Ping! Zine Web Tech Magazine) – Sprint is reportedly close to closing its purchase agreement of acquiring T-Mobile, a move that could reduce competition in the mobile market.
“In an industry this concentrated, normally going from four to three will not make it more competitive,” says law professor at NYU, Harry First. “The incentives are to be more cooperative than competitive.”
According to Forbes, Sprint has agreed to pay roughly $40 per share, around $32 billion, and undertake T-Mobile’s $9 billion debt.
Sprint Chairman Masayoshi Son, who purchased the company last year for $22 billion, says he needs more if they are to stand a chance against top competitor AT&T and Verizon.
“We can start a small fight, but it does not scale, it does not last, it’s not sustainable,” said Son during a speech in March.
If the merger gets approved, Sprint would have lower its costs to match T-Mobiles, a move that could hurt their revenue, reports Reuters. On average, Sprint customers spend $62 a month, while T-Mobile customers only spend $50.
If T-Mobile were to join with Sprint, the company would have over 100 million customers, putting it right behind AT&T and Verizon.