Talks of potential Sprint merger with T-Mobile impact market

How will a combined company affect customers?

OVERLAND PARK, Kan. - Talks of a merger between Sprint and T-Mobile could create the country's third largest telecommunications company - second only to AT&T and Verizon.

‘He's always wanted, I think, to be more of a player in the wireless market," said Economists and Portfolio Manager Chris Butler, with Butler, Lanz & Wagler, L.C. He believes it goes back to Masayoshi Son, Softbank's founder - which holds 80 percent of the Overland Park-based Sprint.

“I think this is that CEO’s way to parlay a Sprint drive that has been benefited from a rising stock market in general, he's using that in an attempt to purchase T-Mobile and turn the 'big 2' into the 'big 3,' said Butler.

Butler realizes there is concern this could create an industry monopoly.

"You are going to have increased concentration, but that concentration results from the merger of two relatively small companies. They may be able to get economies of scale to become more efficient," said Butler.

That competition could end up benefiting you, the consumer.

“I think you'll see faster speeds. I think you'll see better technology, lower costs across the board," Butler said.

At just under $40 a share, T-Mobile’s equity would be valued at about $32 billion.

Now, the question is this.

"Are customers in the wireless industry better served by having two big boys and a slew of also-rans or are they better off with three big boys and no also-rans? To me, it's not that clear cut," said Butler.

It's ultimately up to the FCC and the Justice Department, who already have other deals on their plate involving mergers with AT&T and Comcast.

As for jobs at the campus in Overland Park, a Sprint representative said they are not in a position to comment on “rumors and speculation.”

Sprint's stocks finished lower than normal at just over 4 percent Thursday as speculation circles the market.

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