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T-mobile hopes to challenge wireless “duopoly” with Sprint deal

“Colorful” CEO of T-mobile, John Legere said that a deal with Sprint Corp. can help overcome the “duopoly” of Verizon Wireless and AT&T in United States.

john-legere-t-mobile-ces-2014Legere said that T-Mobile was in need of more airwaves and other resources for taking on larger rivals on being asked about a possibility of a merger with Sprint. Sources indicate that Sprint’s majority holder Softbank Corp. was in talks for merging the carrier with T-mobile.

Ever since Legere’s stint at T-Mobile from 2012, the company has shed standard industry practices like long term customer contracts and introduced more aggressive pricing. These moves have caused the company to earn market share though there has been a speculation of regulators blocking the merger with Sprint as the industry will lose a leading competitor.

Today shares of Washington -based T-Mobile fell 3.2 percent to $31.68 and Sprint fell by 5.8 percent to $8.40 during closing in New York.

T-Mobile has attracted customers by offering $450 in credits and early-terminations fees for subscribers who cancel the contracts to join the carrier. T-Mobile is also increasingly focusing on price cuts which led to an price competetion in the industry. Verizon stated that earning may decline if the competition escalates after which the company saw its biggest intraday stock decline in 5 months.

However Legere responded by saying that he did not see it as  a price war. “I can’t help if someone has artificially used the duopoly to drive artificial margins. That’s not price war — that’s healthy competition and is a very profitable business for us,” he added.

Since may weeks, the Sprint and T-Mobile deal’s news and rumors surfaced all over the media. Would it becomes a reality? What is your opinion on this? Stay tuned on The Next Digit for further updates on this story.

[ Via: Bloomberg ]

About John W Arthur

John is the head of our IT Security team and he writes about Security, IT news on The Next Digit. He was the Employee of the Year 2013 for his selfless support and efficiently setting up the whole security infrastructure. He also occasionally writes on "IT Sec Pro" Print Media of Sweden. All posts by John

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