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Telecom & Wireless

Time For T-Mobil To Be Sold To Sprint (S)

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By Douglas A. McIntyre Updated Published
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T-Mobile, the Deutsche Telekom-owned cellular carrier in America, is a failure and an abject one at that. The firm lost 77,000 subscribers in the third quarter. Most analysts blame the attrition on a poor line-up of handset products and tremendous competition from Verizon Wireless (NYSE:VZ)(NYSE:VOD) and AT&T (NYSE:T). Each of the two larger companies added over one million customers in the quarter ending September 30.

T-Mobile has 33.4 million customers in the US and its chances of doing well as the No.4 firm in its sector are fading to nothing.

T-Mobile’s only chance of being viable is if it is part of  a larger carrier. Sprint needs it the most. It has slightly less than 50 million customers making it smaller than AT&T and Verizon Wireless. Combined with T-Mobile, its subscriber count would be competitive with the other two companies.

Deutsch Telekom would do better owning a piece of Sprint as a proxy for its future success even if it had to put some cash into a deal for Sprint to take its T-Mobile customers.

The argument against a  business combination is simple. Integrating two carrier platforms is complex. The favorable reason for a transaction is that Sprint will be first to market with a new 4G technology–WiMax. That ultra-fast wireless system could pull in new customers or Sprint and T-Mobile.  Sprint already has the support of Clearwire (NASDAQ:CLWR) and tech giants including Intel (NASDAQ:INTC).

T-Mobile has no future. WiMax does.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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