T-Mobile (NYSE: TMUS ) has been riding high in the domestic wireless industry lately, thanks largely to its aggressive tactics that are putting major pressure on larger rivals. According to a recent Counterpoint Research report, The Un-Carrier has now risen to become the No. 3 player in the domestic market with smartphone sales, surpassing Sprint (NYSE: S ) .
If measured based on total connections (including feature phones), Sprint still comes out ahead by a small margin. However, smartphone subscribers are far more valuable than feature phone subscribers, and smartphone penetration has hit a new high in the U.S. of 87%.
With T-Mobile's gains, the rumored merger with Sprint continues to look unlikely. Regulators have tried to pre-emptively and publicly downplayed the likelihood of such a merger getting cleared, but that hasn't stopped Masayoshi Son from lobbying Congress. If combined, Sprint and T-Mobile would have a total subscriber base within spitting distance of Verizon (NYSE: VZ ) , which would dramatically reduce its incentive to compete aggressively on price.
In this segment of Tech Teardown, Erin Kennedy discusses T-Mobile's rise with Evan Niu, CFA, our tech and telecom bureau chief.
(Relevant segment begins at 4:96)
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