Does Verizon Own Sprint? Untangling Two Wireless Titans

Introduction

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In the hyper-competitive U.S. wireless market, Verizon and Sprint are two names that loom large in the minds of consumers. Verizon has cultivated an image as the gold standard for network reliability, with its sprawling nationwide coverage and consistently fast data speeds. Sprint, while smaller, has historically punched above its weight with attractive pricing and a focus on cost-conscious customers.

But do these two telecom giants actually fall under the same corporate structure? Did Verizon snap up Sprint at some point amidst the wave of industry mergers in recent years? It‘s a question that often surfaces among phone shoppers trying to make sense of a sector that has seen its fair share of shakeups.

The short answer is no, Verizon does not currently own Sprint. But the full story is a bit more nuanced. In this comprehensive analysis, we‘ll untangle the relationship between these two wireless players, examine how they stack up in key metrics, and assess whether a potential Verizon/Sprint combination could ever be in the cards. Strap in as we embark on a deep dive into the high-stakes world of mobile carriers.

Tracing the Origins

Every company has an origin story, and Verizon and Sprint are no different. To understand where they are today, we need to first look at how each carrier rose to prominence.

Verizon‘s Family Tree

Verizon‘s lineage can be traced back to the monopoly days of the old AT&T Bell System. When the U.S. government ordered the breakup of Ma Bell in 1984 due to antitrust concerns, one of the resulting regional "Baby Bells" was Bell Atlantic. This company would go on to merge with fellow Baby Bell NYNEX in 1997 and then embark on a transformative deal with GTE in 2000 to form Verizon Communications¹.

The catchy Verizon moniker is actually a portmanteau, derived from the Latin word "veritas" meaning truth and the word "horizon" signifying the forward-looking nature of the company². From those roots, Verizon would go on to assemble a dominating wireless business through both organic growth and savvy acquisitions like the $28 billion pickup of regional provider Alltel in 2008³.

Sprint‘s Winding Journey

Sprint took a more circuitous path to wireless prominence. The company started out as the Southern Pacific Railroad Internal Network Telecommunications (SPRINT) division all the way back in 1899⁴. The name was originally an acronym for the unit‘s ungainly full title.

As the telecommunications market opened up in the latter half of the 20th century, Sprint would evolve from a long-distance provider into one of the first competitors to AT&T. A series of deals, including a merger with Nextel in 2005, gave Sprint a foothold in the wireless business. Later acquisitions of spectrum and network assets from companies like Clearwire bolstered Sprint‘s industry presence throughout the 2000s and 2010s.

The Un-Carrier Upends the Market

Of course, any discussion of the modern U.S. wireless competitive landscape has to include the ascendance of T-Mobile. Under the leadership of brash CEO John Legere, the self-proclaimed "Un-carrier" embarked on a relentless campaign to shake up the staid mobile market in the mid-2010s⁵.

T-Mobile‘s signature moves included abolishing two-year contracts, reimbursing early termination fees for switchers, and later re-introducing unlimited data plans. This maverick strategy struck a chord with consumers and gave the company a cool, subversive brand identity compared to rivals like Verizon and AT&T.

All of this laid the groundwork for T-Mobile‘s blockbuster $26 billion acquisition of Sprint, which closed in 2020 after a grueling two-year regulatory review process⁶. The deal vastly expanded T-Mobile‘s scale and spectrum holdings, putting it on a more even footing to challenge Verizon‘s dominant position.

For Sprint, merging with T-Mobile represented the culmination of a long and often turbulent corporate journey. It gave the brand a fresh start as part of a larger, more muscular entity with grand ambitions in the 5G era.

Network Showdown

On the surface, Verizon and Sprint‘s networks bear a lot of similarities. Both rely on CDMA (code-division multiple access) technology for their 3G and some 4G voice services, a contrast to the GSM standard favored by rivals AT&T and T-Mobile⁷.

This common CDMA backbone means that many Sprint phones are compatible with Verizon‘s network, and vice versa. But that‘s where the technical resemblance ends. In terms of sheer scale and performance, Verizon has a clear edge.

Tale of the Tape

Consider these key data points:

Verizon‘s LTE network covers over 327 million people, or 99% of the U.S. population⁸. Before the T-Mobile merger, Sprint‘s 4G footprint reached about 275 million potential customers.
In OpenSignal‘s latest analysis, Verizon registered an average download speed of 36 Mbps on its LTE network, compared to 31.1 Mbps for Sprint⁹.
Verizon has been more aggressive in building out 5G, with a focus on the high-band millimeter wave spectrum that delivers lightning-fast speeds but limited range. The company has 5G coverage in parts of 35 cities as of early 2021.

Sprint had actually jumped out to an early lead in 5G deployments, courtesy of its sizable mid-band spectrum holdings that offer an attractive compromise between speed and coverage. But T-Mobile‘s takeover has shifted the focus to further building out that mid-band 5G on a wider scale.

Merging Networks

Integrating Sprint‘s network into the "New T-Mobile" will be a lengthy and complex process. The combined company has pledged to invest $40 billion over three years to unify the networks and further improve performance and reach¹⁰.

The goal is to migrate Sprint customers to T-Mobile‘s network backbone, while still leveraging Sprint‘s spectrum assets to augment capacity and 5G rollout efforts. All told, the new T-Mobile aims to cover 99% of Americans with 5G service within six years.

It‘s an ambitious engineering undertaking that will pressure Verizon to further ramp up its own 5G investments. Many analysts believe that T-Mobile‘s strong mid-band spectrum position gives it a valuable head start, especially as 5G applications evolve.

Beyond the Network

Of course, evaluating wireless carriers goes beyond just comparing coverage maps and download speeds. Factors like price, customer service, and brand perception all play a critical role in shaping consumer choice. And this is where Verizon has traditionally had an advantage over Sprint.

Verizon has long focused its pitch to consumers around network quality and reliability. Its "Can you hear me now?" and "America‘s most reliable network" ad campaigns drilled home this brand positioning for decades. And that messaging has resonated – Verizon has ranked highest among national carriers in J.D. Power‘s Wireless Network Quality Study for 25 consecutive testing periods¹¹.

By contrast, Sprint developed more of a value-centric identity, with lower prices and more flexible terms than Verizon‘s premium offering. Sprint‘s cleverly named "Framily Plan" promotion in 2014, which allowed customers to add friends to their account at discounted rates, exemplified this approach.

On the customer care front, Verizon also enjoys an edge. The company topped J.D. Power‘s latest U.S. Wireless Customer Care rankings for full-service carriers¹², its fourth straight win. Before the merger, Sprint consistently placed last among the four national carriers in this study.

The New T-Mobile is aiming to reorient Sprint‘s brand around a value proposition that also includes strong network performance. CEO Mike Sievert has pledged to maintain Sprint‘s aggressive pricing and promotions for at least three years after the merger¹³. The goal is to lure more cost-conscious customers away from Verizon and AT&T as the 5G era takes hold.

An Unlikely Pairing

So with Sprint now under the T-Mobile umbrella, what are the chances that Verizon makes a play to bring Sprint/T-Mobile into its own orbit? The odds of such a combination are vanishingly slim.

For starters, any merger between Verizon and the new Sprint/T-Mobile entity would face enormous regulatory hurdles. T-Mobile‘s acquisition of Sprint was a challenging sell in Washington, requiring a slew of concessions and divestitures to appease antitrust watchdogs who worried about excessive consolidation. A further tie-up reducing the market to just three national carriers would be a non-starter with competition advocates.

The financial calculus also doesn‘t favor a deal. T-Mobile‘s market capitalization, even after the recent pandemic-driven sell-off, sits at a hefty $120 billion¹⁴. Verizon would have to shell out well over $200 billion to pull off a takeover, a staggering sum that would strain its balance sheet and likely draw investor backlash.

Moreover, Verizon doesn‘t seem to feel strategically compelled to pursue a Sprint acquisition. The company has steadily expanded its wireless margins in recent years and is generating strong cash flows to fund its 5G rollout¹⁵. Verizon appears confident in its ability to retain a market leadership position as a standalone player.

Conclusion

After exploring the long, winding histories of Verizon and Sprint, one thing is abundantly clear: These two brands have taken vastly different paths to the top of the U.S. wireless market. Verizon‘s disciplined focus on network superiority and Sprint‘s underdog value emphasis have made for a compelling competitive dynamic over the years.

But the question of whether Verizon actually owns Sprint has a definitive answer: No. Today‘s Sprint is an integral part of T-Mobile, a company that has rapidly emerged as Verizon‘s chief foil. The Sprint brand may live on as part of the "New T-Mobile," but Verizon remains entirely separate from an ownership standpoint.

Looking ahead, the battle lines in the market have crystalized around two poles. In one corner is Verizon, the entrenched industry Goliath determined to leverage its scale and deep pockets to build a dominant 5G position. In the other is the new T-Mobile/Sprint, an upstart that aims to use its spectrum advantage and edgy brand to dethrone the reigning wireless king.

For consumers, this rivalry should hopefully yield a new golden age of innovation and choice in mobile services. As the 5G era progresses, both Verizon and T-Mobile/Sprint will be pushing the envelope in network investment, pricing models, and service quality. The real winners will be the millions of wireless customers who depend on ubiquitous, lightning-fast connectivity in their daily lives.

The question of who owns whom may generate buzz among investors and analysts. But for the average phone shopper, what matters most is the fierce competition that Verizon and Sprint/T-Mobile will wage in the marketplace for years to come. Buckle up for a new chapter in the never-ending wireless wars.