T-Mobile and Sprint merger expected within weeks, then it’s up to the Trump administration

“T-Mobile and Sprint are entering due diligence in a stock-for-stock deal that is expected to make Deutsche Telekom the controlling owner, sources tell CNBC’s David Faber,” Liz Moyer reports for CNBC.

“The exchange ratio for the stocks is expected to be at market, the sources said,” Moyer reports. “The companies are hoping to reach an agreement by the third week of October. Faber said a deal ‘seems likely’ at this point, and the two companies would be able to wring significant costs out of a combined operation.”

“But a merger of the nation’s third- and fourth-largest mobile phone carriers would raise questions about whether regulators would allow the combination or block it on antitrust grounds,” Moyer reports.

U.S. President Donald Trump and Softbank CEO Masayoshi Son in December 2016
U.S. President Donald Trump and Softbank CEO Masayoshi Son in December 2016
“T-Mobile is owned by Deutsche Telekom while Sprint is controlled by SoftBank… The two sides have had on-again, off-again talks. While T-Mobile’s CEO John Legere seems likely to lead a combined company, SoftBank’s Masayoshi Son is expected to want a say in how the company is run.”

Read more in the full article here.

“In 2014, Sprint and Japanese parent SoftBank called off takeover talks with T-Mobile and German parent Deutsche Telekom after sensing US regulators would quash any deal that reduced the field from four to three key players,” Richard Morgan reports for The New York Post. “Their motivation then, as now, was to create a stronger competitor to industry leader Verizon, with a 35.7 percent share, and AT&T, with 33.1 percent.”

“Sprint knew a merger during the Obama administration faced tough odds. AT&T announced plans to buy T-Mobile in 2011, but was blocked by the Justice Department six months later,” Morgan reports. “Acquisition lawyer Jonathan Bender of New York’s Wilk Auslander told The Post that the regulatory odds are better under the Trump administration but that it’s still ‘a tough call.'”

Read more in the full article here.

MacDailyNews Take: T-Sprint? SprinT-Mobile?

Think a T-Mobile+Sprint deal would get approved by regulators this time?

10 Comments

  1. The Trump administration is far more likely to approve a merger. Additionally the T-Mobile merger that failed to get approval would have made AT&T bigger than Verizon. The government hates mergers that make a company the biggest in their category.

    1. Realistically, there are only four national carriers. Everybody else just uses their networks as a virtual private operator. For example, Virgin uses Sprint. TracPhone (and its subsidiaries like Walmart’s Straight Talk) actually uses all four, plus the regional carrier U.S. Cellular. The cost of building a new network from scratch is prohibitive even for a company with the resources of Apple.

      A merger between #3 and #4 would provide reasonable competition for the two heavyweights that control over 2/3 of the market between them. There would be some problems in integrating the networks, of course, since T-Mobile and Sprint use different standards for their base and 3G coverage when LTE service drops out.

    2. For once I agree with you. Since the DOJ blocked the AT&T/T-Mobile merger, T-Mobile reinvented itself. They offered very aggressive plans, and gained significant market share compared to before the merger. I was one of those who switched from AT&T to T-Mobile, and still with T-Mobile now. That competition would not have happened if the merger had been approved.

      https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiLvoCV5cPWAhUMXhQKHWiADTIQjRwIBw&url=https%3A%2F%2Fwww.strategyanalytics.com%2Fstrategy-analytics%2Fnews%2Fstrategy-analytics-press-releases%2Fstrategy-analytics-press-release%2F2015%2F06%2F30%2Fus-wireless-market-to-add-100-million-subscribers-by-2020-says-strategy-analytics&psig=AFQjCNHfJDGpNm0QrAWJc-ZJGwGOr-zEWw&ust=1506547509714882

  2. Gotta wonder how this is going to play out, since Sprint (CDMA) and T-Mobile (GSM) have incompatible legacy networks. From a technical perspective, the TMo-ATT merger would have been seamless, since they were both GSM networks and already shared a data roaming arrangement.

    My wife is on Sprint, and we still run into plenty of areas without LTE coverage. In my experience, if I drop outside LTE coverage, T-Mobile’s HSPA+ (“4G”) service seems a lot faster than Sprint.

    Would TMo and Sprint need to run overlapping legacy networks in the meantime? Even with a universal phone, would new customers be locked into the GSM network if their service is activated using a SIM card? Or conversely, would they be stuck on the old Sprint CDMA network if they don’t install a SIM card?

    Sprint’s going all in with the ridiculously cheap unlimited family plans. But, I’m just wary of their service quality (at least in my area).

  3. T-Mo and sprint are still too small in their current forms against the likes of AT&T and Verizon. I think it’s a merger the government should allow hopefully to make them stronger and compete better against Verizon and AT&T. These two need an ass whipping. Verizon is to the point they can’t even manage their own business or their systems it’s a joke trying to get anything fixed through them it’s a damn shame

  4. I don’t know much about all this, except what I read, and even that doesn’t help much. I’ve been on all 4 carriers, on TMobile about 4 years, and like it better than the others. If a merger will give us even better reception and not change what Tmobile has done, I’m for it. It’s the only company for international service with an American cell company. Love that! Masayoshi Son is used to great cell service in Japan, and I think he won’t tolerate bad service here. Seems to me that the old CDMA thingamajig will have to kick the bucket. But what do I know?

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