Sprint and T-Mobile officially called off merger talks on Saturday, according to The Wall Street Journal.
The third- and fourth-largest US wireless networks said in a joint statement that they couldn’t decide on mutually agreeable terms.
The merger would have resulted in a telecom with more than 130 million US subscribers; for context, AT&T has 137 million subscribers and Verizon has 147 million.
Immediately after the announcement was made, Sprint outlined its plans to build out its stand-alone network. The carrier vowed to invest $ 5 billion-$ 6 billion annually on its network over the next few years. That’s up from the $ 3.5 billion-$ 4 billion the carrier had expected to spend this fiscal year.
Sprint also announced a new multi-year agreement with Altice USA. The mobile virtual network operator (MVNO) agreement will enable Altice USA, the fourth-largest US cable operator, to leverage Sprint’s network to launch its own wireless carrier. MVNOs are essentially wholesalers of wireless spectrum, buying bandwidth from carriers and reselling it under new branding.
- Sprint will be granted access to Altice’s cable infrastructure, which could help the carrier transmit cellular data and develop its 5G network. It could also pull more users onto Sprint’s network. For instance, Sprint customers may be able to use Optimum’s Wi-Fi network, boosting the carrier’s coverage. The carrier is also open to additional MNVO deals with cable companies given they provide Sprint with access to their networks.
- For Altice, which continues to expand its US footprint, the Sprint partnership presents a substantial opportunity. The cable company will have full use of Sprint’s network to provide mobile voice and data to its customers. Altice first began operating in the US in 2015, after acquiring regional cable company Suddenlink. Altice also bought Cablevision in 2016.
Altice is just the latest cable company diving into the wireless market to cushion the impact of diminishing cable customers. By bundling internet services with content, US cable companies are hoping to give customers more value, which could help reduce customer churn. For instance, Comcast began offering wireless service this year on Verizon’s network — it now boasts more than 250,000 Xfinity mobile customers. And Chart Communications plans to launch a wireless service in the first half of 2018.
- Describes how the US wireless carrier is shaping up.
- Explores the effect of the fierce pricing wars taking place, and the methods carriers are using to retain their subscribers.
- Highlights the new technology carriers are using to drive growth and revenue.
- Looks at the potential barriers that could limit carriers’ growth and examines who’s best positioned to come out on top.