WASHINGTON, June 5, 2014 – Another significant telecommunications merger proposition is underway between Sprint and T-Mobile. The Wall Street Journal reported that the acquisition would cost Sprint $32 billion, or about $40 per share in cash and stock.
Sprint and T-Mobile are the third and fourth largest wireless operators in the United States, respectively. The merger could present serious competition for market leaders Verizon Communications and AT&T.
“In order to compete against the big two, AT&T and Verizon, scale is essential,” said Satoru Kikuchi, an analyst at SMBC Nikko Securities Inc. in Tokyo told Bloomberg. “The mobile-phone industry is an industry that needs business investment, so the larger the better.”
This isn’t the first time a telecom company has tried to acquire T-Mobile. AT&T courted T-Mobile three years ago, but the marriage was blocked by regulators, citing antitrust concerns that would leave consumers too few choices in wireless carriers.
In other news, consumers spent more than $113 billion this year on internet access, USA Today reported. That number is expected to rise to $174 billion by 2018.
The report was filed by consulting firm PricewaterhouseCoopers’ Entertainment & Media Outlook 2014-2018.
Mobile Internet expenditures comprised “$53 billion of the total $102 billion [interet] access pie,” USA Today reported, while home broadband made up the lesser share of $49 billion. In four years, the PwC projects that 86 percent of the U.S. population will have mobile service as opposed to the 85.6 percent with home broadband.
Demand for music, movie, and video game streaming services is expected to increase the demand for internet access.
Also, the House Energy and Commerce Subcommittee on Communications and Technology scheduled a hearing for Wednesday June 11, 2014 entitled “Media Ownership in the 21st Century.”
Witnesses have yet to be announced. The hearing will examine the FCC’s “inaction on the statutorily required 2010 quadrennial review of the media ownership rules as well as the continued relevance of the media ownership regulatory framework in general.”
The hearing also aims to review the commission’s institution of new rules on joint sales agreements, plus various media ownership changes undertaken without the quadrennial review.
In a form filed with the Securities and Exchange Commission, AT&T told investors Tuesday that its proposed merger with DirecTV would help building out the company’s “ultra-fast fiber connections to consumers’ homes and compete better with the major cable providers.”
Savings up to 20 percent would result through fewer programming costs. This would allow the company to make additional investments in expanded broadband coverage, the company said.