Could we soon see Sprint/Nextel/Verizon?

So with Sprint faltering lately — even with their announcement of an unlimited plan — could they be a buyout target? It’s strange to consider that, seeing as they’re the No. 3 wireless telecommunications company in America. However, they could fall from that perch rather quickly. They’re predicting losses of 1.2 million customers in the first quarter this year, which is simply no good for a company of their size. So if things don’t get better in the second or third quarters, what is Sprint to do? Not that it’s a certainty, but the Wall Street Journal’s Heidi Moore explores the possibility of a Verizon buyout. Why would Verizon want to do this? Well, they’re under constant pressure to grow an expand. They added 6.9 million subscribers in 2007, which would have been impressive if they hadn’t added 7.1 million in 2006. Yes, they’re taking initiative to grow that rate, including their open handset initiative. But will it be enough to top 7.1 million subscribers? Plus, you know that Verizon hates playing second fiddle to AT&T, who added a record number of subscribers in the fourth quarter of 2007. With acquisitions like Dobbs Communications, AT&T has pulled well ahead of Verizon. An acquisition of Sprint’s 50-million-plus subscribers would push them well over the top. Why wouldn’t Verizon want to do this? Well, they’re eating into Sprint’s customers already, without paying a $25 billion premium to acquire them. See, those 1.2 million subscribers leaving Sprint this quarter have to go somewhere. Verizon would do well to let ex-Sprint customers bring over their old phones for activation on the Verizon network. That would give them a leg up on AT&T in mopping up Sprint’s mess. And it would cost the company far less than a merger. And then you have Qwest Wireless, and MVNO of the Sprint network, who is in talks to switch their allegiance to Verizon. No carrier has more MVNOs than Sprint, and we could see a shift where Verizon acquires these virtual operators. So at that point, who needs a merger? It’s an interesting speculation nonetheless. [The Wall Street Journal]

About the Author

Joe Pawlikowski is the Senior Editor at MobileMoo.com and has been covering the mobile industry full time since 2007. When he's not writing about the tech scene, he can be found discussing his personal love - baseball (and more specifically the New York Yankees) as well as writing on his personal blog.