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Will Sprint, T-Mobile $32B Merger Raise Mobile Prices?

iStock/Thinkstock(NEW YORK) -- Sprint and T-Mobile could be close to dialing up a merger.

A deal between America’s third- and fourth-largest mobile operators would be the latest example of consolidation in the telecommunications industry.

A $32 billion merger may be announced within days, according to reports. Sprint would buy T-Mobile for about $40 a share in cash and stock -- 17 percent more than Wednesday’s closing price.

“It would be three strong competitors and that’s what the Sprint people are talking about,” says wireless industry analyst Jeff Kagan. “Will prices come down? I don’t know. But I don’t think prices are going to go up.”

Consumer groups argue that less competition means higher prices. But in this case a combined Sprint and T-Mobile could mean more competition for the wireless industry leaders AT&T and Verizon.

The talk of this deal comes on the heels of big mergers announced between Comcast and Time Warner Cable, and AT&T and DirecTV.

“The competitive nature, the pricing, the services: they’re all going to change,” says Kagan.

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