Leap and Metro PCS – Make Nice – That is Nice

Implications: Making nice might be necessary to survive the recession.

Analysis: I still think a merger would have been better in the long run.  But mergers only work when one party agrees to give up the reins of control.  I did not  think the companies could sustain independent operations unless the economy was stable and healthy or some type of cooperative relationship where they could help each.

The roaming agreement goes a long way to creating an atmosphere of cooperation.  The question now is whether or not the two carriers can help each in this recession.  The key thing to generating traffic between carriers is roaming.  This enables a user to use their phone anywhere at anytime.  The carriers want to encourage their respective users to use their phone everywhere and at anytime.

However, with markets cratering neither company has the access to capital to complete a merger.  When the economy improves the two carriers can reopen discussions.  For now they need to build up cash and a runway for the next couple of years.  Cooperation will be key to survival as carriers like Verizon Wireless and AT&T will be forced to go downstream into their bases for more customers.

If the two can agree to aggressively go after their common competitors they might last.