September 5, 2014

Sprint and T-Mobile competition intensifies after failed merger talks

Telecom giants Sprint and T-Mobile are currently engaged in an intensifying, industry-wide price war. Provoked by failed merger talks earlier this summer, the battle continues to escalate, with both wireless carriers lowering prices. Late in August, Sprint announced a new strategy for generously-priced data plans to attract the competition's current customers, offering subscribers up to 10 lines (20 gigabytes of available data per month) for $100 a month while T-Mobile, for the same price, will provide four lines with 10 gigabytes of data.

Sprint also promises to repay consumers who are willing to break their currently-held wireless contracts up to $350 to cover associated fees. T-Mobile, in response to Sprint cutting costs for new customers, is rewarding existing plan members with an unlimited LTE data plan for 12 months at no added charge when they recruit new customers. Current subscribers to T-Mobile wireless service will be rewarded for their loyalty with a $10 monthly credit for the year.

In early August, Sprint abandoned its plans —which began to materialize late in 2013—to place a bid on its similarly struggling competitor. T-Mobile CEO John Legere has taken to voicing his frustrations with Sprint's leadership and disparaging its business practices via Twitter:

"While we're over here #doublingyourdata on tablets, @ATT is charging you just to connect it to the data reserved for your phone! #jerks" – @JohnLegere

This mobile network merger attempt has been decidedly and publicly unsuccessful—and heated, to boot. If nothing else, Sprint's fruitless acquisition venture is illustrative of the fact that an M&A advisor can be essential to developing a sound acquisition strategy and generating a successful merger. If your company is considering a merger, be sure consult the experts to ensure a smooth process and a lucrative deal.