T-Mobile and Sprint are in active talks about a merger

“T-Mobile and Sprint are in active talks about a merger, according to people close to the situation,” David Faber reports for CNBC. “Both companies and their parents, Deutsche Telekom and Softbank, have been in frequent conversations about a stock-for-stock merger in which T-Mobile parent Deutsche Telekom would emerge as the majority owner.”

“People close to the situation stress that negotiators are still weeks away from finalizing a deal and believe the chances of reaching an agreement are not assured. The two sides have not yet set an exchange ratio for a deal, but are currently engaged in talks to hammer out a term sheet,” Faber reports. “The biggest issue is whether any merger between the No. 3 and No. 4 wireless carriers in the nation would be approved by antitrust regulators. The risk of rejection by the Department of Justice will play an important role in the final decision made by both sides as to whether they will proceed with a deal.”

“T-Mobile and Sprint have had a seemingly endless dalliance over the years since Softbank took control of Sprint,” Faber reports. “This time, given the all-stock nature contemplated, Softbank would emerge as a large minority holder in any combination. While T-Mobile CEO John Legere is expected to lead any combination that results from a merger, Son has made it clear he wants a say in how the company is run.”

Read more in the full article here.

MacDailyNews Take: Would a stronger Big Three be preferable in terms of competition to what we have in the U.S. now?

11 Comments

  1. …”Would a stronger Big Three be preferable in terms of competition to what we have in the U.S. now?”

    I’m not sure. The big four were quite disparate, with different “personalities”. The T-Mobile – Sprint merger seemed most plausible, with the two being the weaker ones (compared to Verizon and AT&T), but there will be a lot of pain going forward. For one, they are on mutually incompatible technologies and frequencies (Sprint’s CDMA, vs. T-Mobile’s GSM). For some time, they’ll have to continue to support old CDMA phones and frequencies, until they kick every last one off the network and move them all to GSM. I cannot possibly see a situation where a single carrier supports two distinct standards and two distinct lines of products.

    1. Just because CDMA and GSM are two separate systems doesn’t mean a mobile phone can’t access either one. Do you think Apple has separate assembly lines for every system in the World? No. Google phones easily accesses both Sprint and T-Mobile with their Google Fi program.

      1. Apple has separate assembly lines for CDMA and GSM phones. There are increasingly fewer CDMA carriers globally, but for those, Apple makes separate devices. In USA, these are Verizon and Sprint (and whichever are VMNO brands leasing network from them). GSM are T-Mobile and AT&T (and other compatible VMNOs).

        One major point of distinction between CDMA and GSM phones is that CDMA phones do NOT use SIM cards. So far, no GSM carrier has implemented a SIM-less technology; in other words, every GSM carrier still requires SIM to operate. Most likely reason for this is the popularity of the concept, allowing people to easily move SIMs from one phone to the next, and to switch SIMs on their phone, depending on the country where they are.

  2. If it helps T-Mobile and in turn helps us customers, I’m for it. I like SoftBank in Japan, and old Masayoshi Son is known as kind of a Think Outside The Box™ person, his input for T-Mobile might be good. He doesn’t like mediocrity.

  3. Ah, one uses CDMA, and the other GSM. While supposedly LTE is the same all over, except for the channels, 3G is still a major issue. This could cost billions to get both companies on the same wavelength. Pun intended.

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