Fewer Players In Wireless Could Rein In Price Cuts

PETER SVENSSON

NEW YORK (AP) — How many wireless carriers do we need? It's a question that's popping up again as T-Mobile USA is said to be looking at buying Sprint Nextel Corp.

Now that most people have a cell phone and once-heady growth in the industry is slowing, analysts say carriers are going to be looking at buying each other to increase their scale and to avoid competing too much on price. Consumers have been benefiting from relentless price-cutting on cell phone service in the past few years.

But consolidation doesn't come easy to the industry, and the government may not look kindly on the combinations that reduce competition.

U.K.'s Sunday Daily Telegraph reported that T-Mobile USA's owner, Deutsche Telekom AG, has hired banking advisers to explore a bid for Sprint Nextel Corp.

It's not the first time there has been talk of such a combination, and the buyer would have significant hurdles to overcome. But if it were consummated, analysts say, it could at least momentarily put the price-slashing on hold.