Digging a bigger foxhole in the wireless war

The pitched battle between Verizon Wireless and AT&T may dominate headlines, but the fight for domestic wireless share could see a change among the other belligerents. If rumors from the trenches prove true, a deal is being discussed to potentially create a more potent number three among wireless providers in the United States.

Sprint Nextel CEO Dan Hesse spoke Wednesday morning at the Deutsche Bank Securities Inc. Media and Telecom Conference Palm Beach, Fla., but declined to comment on reports of negotiations to acquire T-Mobile USA from Deutsche Teleko.

Sprint has some experience rolling up its peers. The 2009 acquisition of Virgin Mobile USA gave Sprint a leg up in the prepaid wireless market. While Virgin Mobile USA operates as a subsidiary of Sprint, it is unclear how a combination with T-Mobile USA might be structured.

Differences in network infrastructure means there will not be a simple blending of services between Sprint and T-Mobile. Hesse stated last July that a merger of the two could make sense if they use the same 4G technology.

A merger might give the company stronger footing with device makers. There has been ongoing speculation about an Apple iPhone in the works for the broader masses, but we have heard such rumors for years. With Verizon Wireless and AT&T both armed with respective versions of the iPhone, would a combination of Sprint and T-Mobile have a shot at procurring the device?

Diversity in the market may narrow if Sprint acquires T-Mobile, however the reality of two larger players grappling for dominance necessitates the need for bold action.

 

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About Joao-Pierre S. Ruth
New York tech correspondent for Xconomy, tech writer for Investor Uprising, and aspiring urban fantasy writer. I also make brownies and crème brulee.

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