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SoftBank willing to give up control of combined Sprint-T-Mobile?

Posted: , by Alan F.

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SoftBank willing to give up control of combined Sprint-T-Mobile?
There are a number of things that have become roadblocks to a possible merger of  U.S. carriers Sprint and T-Mobile. More than two years ago when the subject was last discussed by the two wireless firms, U.S. regulators let it be known that the deal would not clear the FTC or the FCC. But since then, a couple of important things have happened. One, T-Mobile hopped over Sprint to become the third largest stateside wireless operator. Two, insiders familiar with Sprint's thinking say that its majority owner SoftBank is now willing to give up control of Sprint to Germany's Deutsche Telekom. The latter owns 65% of T-Mobile and is not interested in giving up any of that stake.

During the two-years since the last failed attempt at a hookup between the two carriers, T-Mobile's value has risen from $30 billion to $50 billion and the carrier has become the most innovative in the states. Sprint's valuation has remained steady at $36 billion over the same time frame. While the regulators could still make noise and block a potential deal, the Federal Government is under new management. While President Donald Trump has gone on record as being against AT&T's proposed purchase of Time Warner, he might consider a combined Sprint-T-Mobile to be a welcome challenger to the duopoly at the top of the industry.

And the word from inside sources that SoftBank is fine with giving up control of the merged company is huge. It is a concession from Sprint that T-Mobile's management team (led by president and CEO John Legere) is the superior one of the two. While SoftBank owns 83% of Sprint, it is willing to heavily dilute that percentage in order to make a deal work. After Reuters reported on SoftBank's rumored willingness to let go of control, the shares of both firms soared. T-Mobile closed up 5.5% at $63.92. Sprint closed at $9.30, up 3.33% percent.

SoftBank and Deutsche Telekom are not allowed to discuss a deal with each other yet because of the ongoing FCC auction of 600MHz of spectrum. Federal anti-collusion laws prevent the two from holding talks of any kind until the auction ends, which is expected to take place in April. Once the long drawn out auction is complete, SoftBank will be legally allowed to talk to Deutsche Bank about a merger.

source: Reuters

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posted on 18 Feb 2017, 06:49

1. Mreveryphone (Posts: 1217; Member since: 22 Apr 2014)


Softbank is now realizing the mess they got themselves into now that Sprint has dropped to number 4... How much cash would it take to refarm CDMA into GSM?

posted on 18 Feb 2017, 10:13

2. combatmedic870 (Posts: 899; Member since: 02 Sep 2015)


Cdma and gsm is old 2g/3g tech. It's not going to matter for much longer. Especially with the 600mhz sale happening. Out in the boon docks it'll matter for people that still rely on 3g. But it's going the way of the dodo.

posted on 18 Feb 2017, 11:01

3. remixfa (Posts: 14600; Member since: 19 Dec 2008)


NO. Absolutely NOT.

Tmobile doesnt need sprint's baggage to take on the big dogs. They've proven that. And Softbank has openly said that the reason for the merger is to destroy Tmobile's downward pressure on pricing in the industry. They want 3 companies, just like canada, so they can raise pricing to canadian levels which is a massive price spike back to the old days before good competition. Good for investors, bad for everyone else.

The networks aren't compatible. It would need billions/trillions to get those redundant towers taken down or converted to Tmobile's uses and then even longer to properly use the new spectrum that absorbing sprint would give.

No. Let Sprint fall on it's own and absorb the customers and spectrum at a discount without having to absorb its debt and bad decisions.

posted on 18 Feb 2017, 20:20

4. tyger11 (Posts: 191; Member since: 29 Oct 2012)


This would be great. Get some 600MHz spectrum, take over Sprint's customers and towers (and SPECTRUM), and put Legere in charge. It would still be the third-largest carrier, but it would be in a very good position to compete. Most Sprint users are using LTE by now anyway, right? So converting CDMA over to GSM shouldn't disrupt THAT much. It's been done before (Sprint retired WiMAX plus the old PCS networks, after all).

posted on 20 Feb 2017, 08:47

6. remixfa (Posts: 14600; Member since: 19 Dec 2008)


they aren't compatible in the least. And their LTE network is atrocious. Saw it first hand this weekend.

posted on 19 Feb 2017, 11:25

5. etron (Posts: 16; Member since: 12 Sep 2014)


The only good thing about merging with sprint is the spectrum but if they have to much of it they might have to let some go otherwise a bad deal

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