Sprint mulling plan to acquire T-Mobile USA: report

Sprint mulling plan to acquire T-Mobile USA: reportU. S. wireless carrier Sprint is mulling a plan to acquire T-Mobile USA in at a price of more than $20 billion, according to a report by Bloomberg.

The reported deal would combine the current No. 3 and No. 4 wireless carriers by revenue. However, even the combined entity, created from their potential merger of Sprint and T-Mobile, will still be on the third spot after AT&T and Verizon. But, any such merger will still be very beneficial for Sprint as it will be in a far better position to face AT&T and Verizon.

The unconfirmed report was enough to send shares of T-Mobile USA up by more than 8 per cent in the after-hours trading.

However, any such deal will have to clear many regulatory hurdles. It is worth mentioning here that AT&T had also tried to acquire T-Mobile USA nearly two years back in a deal worth $39 billion, but the deal failed to win approval from the U. S. Justice Department.

The U. S. Justice Department had declined to approve AT&T's plan for buying T-Mobile USA citing its concerns over the adverse effects of consolidation on competition in the market.

Though a merger between Sprint and T-Mobile will not create the country's biggest telecommunications firm, yet it will definitely lead to consolidation, which in turn could hurt competition.

Moreover, it will not be easy for Sprint to merge T-Mobile's business into its own as T-Mobile USA's network is based on GSM and HSPA+, while Sprint's network run on CDMA technology.