Possible Merger between T-Mobile and Sprint - Term Paper Example

This paper is going to look at a possible merger between T-Mobile and Sprint. It will provide an overview of the industry, the history of companies, how the companies will integrate after the merger, historical financials as well as projected financials. This paper will also look at the industry competitors, past successful mergers, and failed mergers. It will cover the benefits if the merger takes place and the associated risks with the merger.

T-mobile and Sprint’s Merger and Acquisition Report Introduction T-Mobile US, Inc. is a mobile system running company with headquarters in Washington. The company caters to millions and is almost the fourth largest mobile company in the U.S. Sprint mobile is another telecommunication company in the U.S.; its headquarters is in Kansas (Antaki, Borst, Brzeski, & Sze, 2004). The company is a giant internet service provider, but in 2013, a Japanese telecommunication company named Softbank Corporation purchased the majority of its shares (Theodore, Rappaport, Annamalai, Buehrer, & William, 2002).

This report concentrates on the details of the merger between T-Mobile and Sprint. It is believed that the Japanese company Soft Bank is trying to enter the U.S. market. Industry Nokia Telsa and Radio communications led to the development of the telecom industry from 1900 onwards. Telecommunication is a growing industry and uses high technology in its operations. United States (U.S.) being the world’s most technologically efficient nation has a well-established telecom industry (FCC, 2005).

“Companies in this industry provide wireless and wireline telephone and data services; cable and satellite television distribution services; and Internet access. Major companies include the US-based AT&T, Verizon Communications, and Comcast, as well as Japan's Nippon Telegraph and Telephone Corporation, Spanish firm Telefonica, and China Mobile. Demand is driven by technological innovation and by growth in business activity and consumer spending. The profitability of individual companies depends on efficient operations and good marketing.

Large companies have big economies of scale in providing a highly automated service to large numbers of customers and have the financial resources required to build and maintain large networks. Smaller companies can compete effectively in small markets or by providing specialty services. The industry is highly concentrated: the 50 largest companies generate about 90 percent of revenue. A major source of revenue is wireless services (39 percent of industry revenue); wireline services (33 percent of industry revenue); and cable distribution (24 percent). Other services include satellite telecommunications (Hoovers, a D&B Company).” More than 3.8 million Americans are employed in the wireless industry either directly or indirectly. The strength comprises almost 2.6% of the total employment in the U.S.