HAVE WE LEARNED NOTHING: Softbank bidding on T-Mobile

It’s déjà vu all over again. –Yogi Berra

Oh, and how we thought we were done with the most overhyped and ultimately annoying story of 2013. Softbank “won,” DISH “lost,” and Sprint went on to lose millions of dollars and millions of customers. But… it’s back.

We had our first glimpses of the zomble-like reanimation of this story last week, when reports surfaced that DISH looked to be making a serious offer on T-Mobile. Now Reuters reports that not only is Softbank now making serious efforts to get into the bidding for T-Mobile, but they may actually be in the final stages of closing a deal.

It really remains to be seen, though, whether US regulators would allow one overseas company, especially one with a history of using easily-hacked equipment, to own what were (until recently) three separate US carriers: T-Mobile, Sprint, and MetroPCS. Together, the combined company would represent serious competition for AT&T and Verizon, who together have dominated the wireless market in this country. It’s hard to say whether a strong new company would be good or bad for competition.

What does seem obvious is that if the companies were allowed to merge, it would be years before corporate synergies would allow them to make any serious money. Sprint just finally shed itself of the terrible shackles of its legacy Nextel technology, and if it were to combine with T-Mobile, it would have to go through yet another generational shift to get its customers off the old Sprint network onto something compatible with T-Mobile’s GSM technology. This would likely involve years of chargebacks and bad balance sheets.

Softbank has tons of money to spend, that’s not the problem. The problem is that Sprint has shown through its history that it’s been unable to retain customers as it sheds old technologies. Sprint’s backed the wrong horse so many times — Nextel and WiMax being the most celebrated tech failures in its portfolio — that it’s had to repeatedly move customers away from older tech with expensive upgrade offers. Unfortunately, customers have just as often as not moved to a different cell provider instead.

Here at The Solid Signal Blog we’ll be watching this story and obviously hoping it doesn’t turn into another soap opera. We’ll do our best to keep the updates to a minimum, so stay with us and we’ll all get through this together.

About the Author

Stuart Sweet
Stuart Sweet is the editor-in-chief of The Solid Signal Blog and a "master plumber" at Signal Group, LLC. He is the author of over 8,000 articles and longform tutorials including many posted here. Reach him by clicking on "Contact the Editor" at the bottom of this page.