¶ … Mobile / Sprint Merger
Within the more and more dynamic and challenging economic, social and technological context, the economic agents devise a wide array of coping mechanisms. One common means in which they strive to consolidate their competitive positions is through mergers and acquisitions. These imply the unification of two traditional competitors in a means in which mutual benefits are created, such as wider access to the market, know how, expertise, resources and so on.
Today, a piece of news which torments the American business community is related to the potential merger between mobile telephone monoliths T-Mobile and Sprint. It is the opinion of this study that the merger would be of a positive impact for the two firms. The following lines reveal the rationale for this conclusion.
The financial state of the companies
Data is not available for the entire 2010 fiscal year, but the information which is available indicates a difficult year, in which the profits of the two organizations registered negative increase rates. The main reason for this situation is generated by the internationalized economic crisis which has reduced the purchasing powers of consumers. The result is acceptable and explainable in a context in which the demand for mobile telephones and the adherent services is strictly pegged to the overall state of the economy and to the consumer spending capabilities.
At a more numeric level, the financial situations of the two organizations are revealed by the following:
T-Mobile registered a 0.5 per cent decrease in revenues at the end of the third quarter in 210 as opposed to the same period in 2009
T-Mobile registered a 0.10 billion decrease in the operating income adherent to the third quarter of 2010 comparative to the same period of 2009. The costs registered were also increased and the organizational emphasis is currently on revenue stabilization (T-Mobile Website, 2011).
Sprint's revenues increased from $32,260 million in 2009 to $32,563 million in 2010
Sprint's gross profits decreased from $15,825 million in 2009 to $15,071 million in 2010 (Bloomberg Businessweek, 2011).
3. The impact of a merger on...
Mobile-Sprint Merger A merger between T-Mobile and Sprint could produce shareholder value for both companies because both companies are underperforming as stocks and both companies' fortunes rest on the prepaid smartphone market. Both corporations trail market share leaders AT&T and Verizon, with Sprint 3rd and T-Mobile 4th. Many believe that if these companies do not make a major move soon, they could be squeezed out of the market. Deutsche Telekom has
The smaller firms therefore may be able to gain entry into the market but are generally unable to compete on quality with the top firms, and this is allowing the market leaders to grow as a result. Another factor that is taken into consideration is the regulatory entry and exit conditions. In the mobile industry, there is a significant barrier in spectrum. Given that there is a finite amount of
The transaction was all-cash and was estimated at approximately $4.3 billion, including the assumption of approximately $900 million of net debt. Before acquiring Alamosa, Sprint Nextel Corporation was involved in some litigation issue with one of Alamosa Holdings' subsidiaries, AirGate PCS Inc. Therefore, completing the Alamosa acquisition brought final resolution in this matter. Alamosa was one of Sprint's most important affiliates before the merger with Nextel and the acquisition
Goldenline Market Plan Golden Line will prove to the business community that it is the most prestigious technology firm in the industry. With an increase in technological advancement, Golden Line will pave the way for the future in the electronics industry. Golden Line intends to dominate the mobile phone industry by launching unbelievable items. The company's smart phones will be incomparable to competition with Motorola and Samsung. The new products will
T-Mobile T-Mobile is actually a business of Deutsche Telekom. According to a profile of the company, T-Mobile International manages Deutsche Telekom's wireless operations (T-Mobile International Profile). These operations are inclusive of T-Mobile (UK), T-Mobile Deutschland, and T-Mobile Austria. Additionally, the profile explains that T-Mobile International also operates in the United States through the acquisition of VoiceStream Wireless and Powertel (T-Mobile International Profile). The company is now known as T-Mobile USA and
The deal was immediately criticized as anti-competitive by William Kennard, the chairman of the Federal Communications Commission, and by the Communications Workers of America, which represents some workers at both of the merged companies. But neither government regulators nor union bureaucrats will have the slightest impact on the latest merger. They have neither the power nor the desire to oppose the plans of the giant telecommunications monopolies. More substantial opposition
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