x PhoneArena is looking for new authors! To view all available positions, click here.
  • Home
  • News
  • Sprint and T-Mobile have agreed to "broad outlines" of a $32 billion merger

Sprint and T-Mobile have agreed to "broad outlines" of a $32 billion merger

Posted: , by Michael H.

Tags:

Sprint and T-Mobile have agreed to
The rumors about a potential Sprint/T-Mobile merger (which is to say a Softbank/Deutsche Telekom merger) have been circulating for quite a long time, though they have been picking up steam recently. Now, The Wall Street Journal is reporting that the deal may be close to complete as the two sides have agreed on "broad outlines" regarding a deal which values T-Mobile at $32 billion. Supposedly, the deal could be finalized this summer, and the terms right now have Sprint (aka Softbank) paying $40 per share to buy T-Mobile (a Deutsche Telekom property), which adds up to $32 billion in total. This is slightly less than the $40 billion rumored early in the week. 

Of course, a deal like this has quite a lot of hurdles to jump even if Sprint and T-Mobile do come to a full agreement on terms. The number one issue surrounding this potential merger is the same issue that caused AT&T's bid to purchase T-Mobile to fall through. This deal would mean even more consolidation in the mobile carrier market, which would mean less competition, and potentially higher costs for customers. Back in January, the US Department of Justice was reported to already be "skeptical" of a deal between the two companies, and it's hard to imagine that much has changed since then. 

The potential of failure in this endeavor has already been discussed though. As of now, the deal supposedly stipulates that if the merger is rejected by regulatory bodies, Sprint would owe T-Mobile $1 billion and "other assets". This is quite a bit less than the break-up fee that AT&T had to pay when that deal fell through, which was $3 billion plus a roaming deal

There is always a chance that the deal will be approved though. There is thinking that right now is the time to strike for Sprint, because the FCC spectrum auctions that are happening and the net neutrality debate are working against smaller carriers, and this merger would remove the two smaller carriers from the board and replace it with one that could compete (or collude) with AT&T and Verizon. 

source: WSJ

57 Comments
  • Options
    Close




posted on 04 Jun 2014, 19:34 9

1. Totse2k15 (Posts: 276; Member since: 11 Feb 2014)


... I hope Sprint don't turn T-M to crap. Lol @ new logo. Good luck T-M and Legere. Legere ftw!

posted on 04 Jun 2014, 22:22 2

32. Droid_X_Doug (Posts: 5955; Member since: 22 Dec 2010)


Not. Gonna. Happen. T-Mo/DT is going to be booking a one-time earning result and Sprint/SoftBank will be taking a one-time hit.

Wages of arrogance and what-not for Son-boy.

posted on 05 Jun 2014, 07:50 1

41. SuperAndroidEvo (Posts: 4438; Member since: 15 Apr 2011)


This is actually going to be a good thing because eventually everything will be LTE. Voice & Data. So CDMA & GSM will become obsolete, sooner than later.

In 6 short years 3G will be no more. Bank on that!

posted on 05 Jun 2014, 07:51 2

42. DonkeySauce (Posts: 161; Member since: 03 Dec 2011)


I think this has a lot of potential. Sprint has a ton of spectrum and some really great network assets, some still need a good bit of improving. But what's really hurting Sprint now is reputation. The network has massively improved and is running great in a lot of areas, but that doesn't matter when the reputation is in the gutter, people just assume it still sucks. If they can pool resources, and re-brand the new company as T Mobile to capitalize on the upward momentum they've got, we could see great things and maybe, finally, a true competitor to Red and Blue

posted on 05 Jun 2014, 10:43 1

46. rdaex (Posts: 97; Member since: 24 Oct 2012)


Yea! So lets take the company with the garbage (VERY MUCH EARNED) reputation, and let them buy the company who has been more consumer friendly than any other!

posted on 04 Jun 2014, 19:38 5

2. MartyK (Posts: 726; Member since: 11 Apr 2012)


Dang...I guess; If it's allow there should be a clause in the deal that requires T-mobile CEO and upper management operate/run the new company for no less than 10 years.

posted on 04 Jun 2014, 19:40 3

3. blackberry_Boy (Posts: 172; Member since: 27 May 2014)


I hope it don't go threw just pay t mobile the break up fee so they can do more changes like they been doing sprint sucks they need to just go away and die t mobile is doing fine the way it is with more t mobile changes in the pipe line no

posted on 04 Jun 2014, 19:42 12

4. 0xFFFF (Posts: 3772; Member since: 16 Apr 2014)


Every merger results in higher costs for consumers. I don't know why this is even a "question". Many times, this is the entire point of the merger in the first place.

Sprint is throwing money at T-Mobile instead of fixing its own house. The same approach Sprint has used for years and gotten nothing but disastrous consequences.

posted on 04 Jun 2014, 19:49 4

6. Miracles (Posts: 560; Member since: 31 Aug 2013)


Yup. If everything you say about prices is true, I might have to make my one way trip into a round trip (back to AT&T).

posted on 04 Jun 2014, 19:51 5

7. Arte-8800 (banned) (Posts: 4562; Member since: 13 Mar 2014)


Why don't they spend that revenue on infrastructure, liquidate and enhance and provide value for money, rather than buying T-Mobile.

posted on 05 Jun 2014, 00:10 3

36. Jeradiah3 (Posts: 1009; Member since: 11 Feb 2010)


because they wasted a ton of money on the iPhone deal that they're not even getting a profit from. Sprint should have used the money they used to get the iPhone to improve their network.

Thats my opinion tho

posted on 04 Jun 2014, 20:00 2

10. youlookfoolish (Posts: 131; Member since: 14 Dec 2012)


So wait, you're saying the current Softbank entity spent that money?

Softbank bought Nextel? Softbank had anything to do with Sprint before 2013? You did say year"S". That is why it is a "question", genius. Because Softbank wants to be more competitive and has a history of running competitive mobile telecoms in Japan.

posted on 04 Jun 2014, 22:39 2

34. Miracles (Posts: 560; Member since: 31 Aug 2013)


Softbank is 3rd in Japan. Likewise Sprint is in a similar position. Is Softbank even doing good in Japan?

posted on 04 Jun 2014, 20:58 4

17. networkdood (Posts: 6328; Member since: 31 Mar 2010)


Mergers mean more money for the 1% and a loss of jobs for the nation...

posted on 05 Jun 2014, 00:23 1

38. Droid_X_Doug (Posts: 5955; Member since: 22 Dec 2010)


You neglected to mention more former wage-earners being pushed below the poverty line as a consequence of the merger(s). How else do the financials get made to 'work'? The 1% sure as Hell won't take the hit.

posted on 06 Jun 2014, 00:54 2

51. corporateJP (Posts: 1865; Member since: 28 Nov 2009)


If I was the government, I'd demand that every off-shore call center job is returned to the United States as a stipulation of the merger to go through.

T-Mobile has horrid call centers, 4 of 5 are off-shore and you are lucky to get a CSR who speaks quality freaking English. 1 in 5 calls gets routed to Kansas if you are lucky.

But, the government won't do this because they get their pockets padded by these corporations and would rather have every citizen at their mercy on government assistance.

Trash.

posted on 04 Jun 2014, 19:49 2

5. youlookfoolish (Posts: 131; Member since: 14 Dec 2012)


The level of education reflected in the spelling and grammar from T-Mobile fans is high comedy.

I hope the US government doesn't ask for too many concessions. I hope the new company uses its capital to quickly sunset CDMA and make their LTE uniform and robust. I actually don't care for Legere but if he stays, fine. I hope the new company and its new scope can really push AT&T and Verizon with earnings and revenue. And I hope the T-Mobile trolls get over themselves.

For months its been painfully obvious what was going to happen. Phonearena his posted multiple articles as well as numerous other sources. This was never a rumor. T-Mobile as it was just honestly lost a ton of money. Even with their subscriber growth recently which more than half of which was prepaid.

posted on 04 Jun 2014, 19:52 11

8. 0xFFFF (Posts: 3772; Member since: 16 Apr 2014)


"The level of education reflected in the spelling and grammar from T-Mobile fans is high comedy."

...

"Phonearena his posted..."
"T-Mobile as it was just honestly lost a ton of money."
"Even with their subscriber growth recently which more than half of which was prepaid."

Enjoy the high comedy of irony, much?

posted on 04 Jun 2014, 19:56 1

9. youlookfoolish (Posts: 131; Member since: 14 Dec 2012)


I mis-typed "his" instead of "has".

Oops. Nowhere near as embarrassing or egregious as some of the other post. Everything else was just fine. Thanks.

posted on 04 Jun 2014, 20:58 9

18. networkdood (Posts: 6328; Member since: 31 Mar 2010)


Open mouth and insert foot...

posted on 04 Jun 2014, 21:03 7

24. networkdood (Posts: 6328; Member since: 31 Mar 2010)


wow, your name is so....ironic...

posted on 04 Jun 2014, 20:19 2

13. Canaan (Posts: 131; Member since: 25 May 2014)


T-mobile didn't lose that much money, it still managed to make billions and fell short by 150 million based on projections of the company if I recall correctly. I assume the losing profits came from T-mobile paying/closing off the contracts of their new customers?

posted on 04 Jun 2014, 21:03 2

23. networkdood (Posts: 6328; Member since: 31 Mar 2010)


I would think so - hey that extra 1 billion would help ease the loss, for now, but, DK wants to sell T Mobile....
What if T Mobile buys itself out, like Verizon did....

posted on 04 Jun 2014, 21:12 4

26. quesoesgrande (Posts: 217; Member since: 03 Aug 2011)


As a T-Mobile customer, I would like to kindly say that you're making a hasty generalization, and that you should really read your own writing. Its pretty ironic, given that you're calling us out for the same thing you're doing. Also, I'd appreciate it if you would point out any errors that I may have made. Wait a moment! THERE AREN'T ANY!

posted on 04 Jun 2014, 22:17 2

31. PapaSmurf (Posts: 8924; Member since: 14 May 2012)


Wait a minute - there aren't any!*

-T-Mobile customer

posted on 04 Jun 2014, 20:04 3

11. wrm2013 (Posts: 188; Member since: 28 Mar 2013)


I have tmobile and if this happens I'll drop them and go to Verizon.

posted on 04 Jun 2014, 20:59 1

19. networkdood (Posts: 6328; Member since: 31 Mar 2010)


Yuck, but, I may go to Straight Talk....

posted on 04 Jun 2014, 21:31

27. engineer-1701d (Posts: 1246; Member since: 13 Mar 2014)


no you won't its too much money

posted on 04 Jun 2014, 20:09 4

12. eman99 (Posts: 238; Member since: 03 Aug 2010)


Well I'm sad to say I'm a sprint costumer and I hope it goes through just for better service

posted on 04 Jun 2014, 21:32 2

28. engineer-1701d (Posts: 1246; Member since: 13 Mar 2014)


amen for people with sprint

posted on 04 Jun 2014, 23:08

35. Edward_bly (Posts: 210; Member since: 11 Dec 2013)


Same :-|

posted on 05 Jun 2014, 13:23 1

47. atlvideoguy (Posts: 42; Member since: 24 Feb 2012)


you can go ahead and get better service now since T-Mobile pays ETF's

posted on 04 Jun 2014, 20:19 5

14. -box- (Posts: 3881; Member since: 04 Jan 2012)


I hope it doesn't go through, and that the failed acquisition fee is closer to $10 billion than $1 billion.

Sprint sucks with its acquisitions, most notably Nextel.

posted on 04 Jun 2014, 21:02 4

22. networkdood (Posts: 6328; Member since: 31 Mar 2010)


It sure does - they start a new technology every other year and leave the old technology unfinished, or they sell it off, again...see ClearWire...

posted on 04 Jun 2014, 20:21 5

15. PBXtech (Posts: 984; Member since: 21 Oct 2013)


Nooooooooooooooooo........

posted on 04 Jun 2014, 20:30 5

16. NoFanboy (Posts: 242; Member since: 18 Nov 2013)


T-Mobile should be buying Sprint

posted on 04 Jun 2014, 21:00

20. networkdood (Posts: 6328; Member since: 31 Mar 2010)


Wow, Sprint sucks in my area...
Anyway, I may leave T Mobile for Straight Talk:
unlimited talk
unlimited messaging
3GB 4G LTE data - no overages
45.00/month

T Mobile charges 50.00 and I get only 1 GB of high speed data....
Not sure if I want T-Mobile towers or AT&T towers when I go to Straight Talk....

posted on 05 Jun 2014, 02:29 1

39. o0Exia0o (Posts: 428; Member since: 01 Feb 2013)


I'll just leave this here for you to read up on Straight Talk and their policy regarding data. I once had the same thoughts that you do but after learning more about Straight Talk, how they handle those who use data and what they have the right to do to you and your service if they believe you to “abuse” (in their term) the service I decided to keep what I have.

http://www.phonearena.com/news/Straight-Talk-forced-to-confess-by-class-action-suit-2.5GB-of-high-speed-data-monthly-and-then-2GEDGE_id47883

posted on 06 Jun 2014, 01:01 1

52. corporateJP (Posts: 1865; Member since: 28 Nov 2009)


Switch to Cricket.

No overages, same specs but higher priority on a better network.

posted on 04 Jun 2014, 21:02 6

21. Gawain (Posts: 375; Member since: 15 Apr 2010)


I have to echo what PBXTech said, "Noooooooooooo....." This is the worst idea since ever. No common network platforms, sh*tty Sprint network with about 18 different mobile standards and ugh. I hope this deal fails, T-Mobile is better off with $1 billion in cash in a break-up than with whatever DT gets from Sprint to buy the whole thing. Garbage all around.

posted on 04 Jun 2014, 21:05 3

25. networkdood (Posts: 6328; Member since: 31 Mar 2010)


Hopefully, Sprint's new parent can unify the technology, I mean, they are not even close to being done with their network and now they want to buy another network??? Wowsers....

posted on 05 Jun 2014, 00:14 1

37. Shatter (Posts: 2031; Member since: 29 May 2013)


A merger also means Sprint gets Metro PCS.

posted on 06 Jun 2014, 07:17

56. dorian827 (Posts: 131; Member since: 28 Jul 2012)


I agree, they always propose and never follow up. Their coverage is HORRIBLE compared to T Mobile let alone Verizon and AT&T

posted on 04 Jun 2014, 21:55 2

29. joe1blue (Posts: 128; Member since: 25 Jul 2013)


I just left sprint for t-mobile guess ill be leaving sprint again!!!

posted on 04 Jun 2014, 22:07 3

30. Shatter (Posts: 2031; Member since: 29 May 2013)


It will cost them 40 billion just to make the networks compatible with each other...

posted on 04 Jun 2014, 22:34 7

33. agentoj (Posts: 104; Member since: 29 Oct 2009)


Sprint stay away. Everything you touch dies.

posted on 05 Jun 2014, 02:58 1

40. gnotch (Posts: 19; Member since: 31 Dec 2013)


NOOOOOOOO. i left virgin mobile to move on to a better network ~ i can't escape sprint. ;~;

posted on 05 Jun 2014, 08:48 1

43. johnbftl (Posts: 224; Member since: 09 Jun 2012)


Everyone keeps crying that T-Mobile should buy Sprint at the rate they've been going. Do you not understand they are owned by Deutsche Telecom? DT has been trying to sell T-Mobile and get out of the US market for nearly a decade now. They have been bleeding money since they launched in the US. It makes sense for these two companies to merge, and the only way it will happen is with SoftBank purchasing T-Mobile because DT does not want to stay in the States.

If, and this is a big IF, SoftBank were smart about this, they can make a lot of the money back quickly from the merger and appease the DOJ. Sprint does not need the spectrum. They currently have more spectrum than all the other carriers. SoftBank would be wise to sell off most, if not all of Metro's spectrum and customers to regionals. In doing so it could create a potential 4th contender like US Cellular.

The government would be wise to allow this merger. Neither company is going to survive on its own or compete with the big two. It's scary to think, but they could eventually go the way of Amp'd Mobile and simply send a text message to all their subscribers telling them they have 30 days to port out or lose their number because the network is going down.

posted on 05 Jun 2014, 09:22 1

44. youlookfoolish (Posts: 131; Member since: 14 Dec 2012)


Excellent post.

Blind devotion from people who pay a bill to a service provider is impressive. But their outright fanaticism is ridiculous and annoying. Quick to post something asinine on a message board but very slow to understand facts.

Losing $150 million and adding more prepaid customers than anything else is horrific business. It might seem cool based on good marketing. Sprint has even copied T-Mobile on its postpaid plan structure. Even paying off ETFs.

But not everything was copied. Because it's not sustainable, or profitable.

Deutsche Telecom couldn't wait to unload T-Mobile. If not Sprint, it'll be Dish or someone else. These marketing strategies might seem like a boon to consumers but that's all they are. Marketing.

T-Mobile as a company was not healthy. Ever. Prepaid subscriber gain is not impressive. Verizon, nor AT&T ever cared. T-Mobile was fighting with Sprint for scraps.

posted on 05 Jun 2014, 09:52 2

45. tokuzumi (Posts: 351; Member since: 27 Aug 2009)


This could be T-Mobile's financial strategy. They woo a potential buyer, set up some sweetheart deal if the merger doesn't go through, and then they pocket a decent chunk of change, and get some swag in the process. T-Mobile getting access to the 1900mHz spectrum for their HSPA+ network was a huge win for them. It meant that AT&T phones would no longer languish on edge on T-Mobile's network. They also started that huge "un-carrier" push, and went full speed ahead on their LTE build out.

In a few years, it will be time for T-Mobile to woo Verizon.

posted on 06 Jun 2014, 07:20

57. dorian827 (Posts: 131; Member since: 28 Jul 2012)


I hope it doesn't go through, Sprint is horrible in the most ways. I do like that T Mobile will get a huge chunk if not. Sprint needs to focus on the poor network and inner business techniques. If anything they should invest in more coverage for themselves.

posted on 05 Jun 2014, 13:39

48. CheckThisOut2k (Posts: 48; Member since: 25 Apr 2014)


My state doesn't have T-Mobile and the closes Sprint nearby is 45 minutes away. If I get Sprint (Which I'm not planning to) would I have the option to go with T-Mobile or Sprint?

posted on 05 Jun 2014, 14:44 1

49. OldNorseBruin (Posts: 211; Member since: 12 Mar 2013)


When the Department of Justice KILLS this deal, T-MOBILE will receive $1 Billion to further improve its network. Thanks Sonny Boy for the free cash. ( HINT: Sonny Boy, you should have used that money to create a functional 3G network on SPRINT!)

posted on 05 Jun 2014, 17:51

50. Professor (Posts: 192; Member since: 02 Aug 2013)


I used to have Sprint in the past. Their "service" sucks. I also used to have a phone with the thiefts (AT&T). That means that if the merger between Sprint and T-Mobile succeed I am going back to Verizon because I don't want to be back with Sprint not even if they are half or way less than Verizon. When I was with Verizon I never have no problem with them aside from having to pay more than triple the amount I am currently paying...

posted on 06 Jun 2014, 01:07 2

53. corporateJP (Posts: 1865; Member since: 28 Nov 2009)


I agree on the Sprint part, but, boy, if you think AT&T are thieves, you got another thing coming with Verizon...

posted on 06 Jun 2014, 05:55 1

54. volvoV70guy (Posts: 13; Member since: 06 Jun 2014)


Is there any indication that there would be a merger? First of all, this isn't Sprint buying T-Mobile. It's the owner of Sprint buying a second network. The network's aren't compatible. Everybody hates Sprint. T-Mobile is doing well lately... So, is this actually more of a way for Softbank to unload Sprint?

posted on 06 Jun 2014, 07:15

55. dorian827 (Posts: 131; Member since: 28 Jul 2012)


As a previous subscriber to Sprint for 4 years I'd have to say they are the worst. I don't want them to ruin a complete great carrier like T Mobile. Especially with Sprint being a primary CDMA carrier GSM would be hopefully left alone for T Mobile.

When I had Sprint they had the worst coverage, and always proposed and never fulfilled. I have went with Verizon first and they were excellent but I like the idea of GSM so I'm now with AT&T which they are excellent as well.

Here's an example:
My wife works at Sprint calling center in Colorado her LG G2 phone gets barely 3G in the basement, while my Nokia Lumia 520 gets 3-4 bars of 4G at 4-6Mbps.

Sprint simply lacks as a carrier and I hate this merger ideal.

Want to comment? Please login or register.

Latest stories