Report: SoftBank calls off Sprint-T-Mobile merger talks

Report: SoftBank calls off Sprint-T-Mobile merger talks
A report out of Japan this morning states that SoftBank, majority owner of Sprint, has called off talks that were being held to merge Sprint and T-Mobile. Last week, there was word that both U.S. based carriers and their respective corporate parents (Deutsche Telekom is the majority owner of T-Mobile) had worked out the broad outline of a transaction which would have left Deutsche Telekom as the majority owner of the combined company. T-Mobile president and CEO John Legere was apparently set to run the wireless operator that would rise from the merger of the third and fourth largest U.S. carriers. 

Today's report states that SoftBank has changed its mind and is now seeking control of the merged company. At a board meeting reportedly held on Friday, SoftBank decided to put the kibosh on the merger talks and will supposedly tell Deutsche Telekom tomorrow. A Sprint-T-Mobile merger has been rumored for some time, and the last time the pair was this serious about a merger was in 2014, when Sprint was the stronger of the two. Back then, the FCC and DOJ both made negative comments about a potential deal, and talks ended immediately.

Now, T-Mobile is not only the more successful of the two carriers, it is the most innovative and fasting growing wireless operator in the states. Led by CEO Legere, who is unconventional to say the least, T-Mobile was responsible for most of the profits in the industry last quarter.

What happens from here is not totally clear. T-Mobile doesn't require a merger with Sprint to thrive, but is interested in Sprint's hoard of high frequency 2.5GHz spectrum. The combination of T-Mobile's low-frequency 600MHz and 700MHz airwaves would mesh perfectly with Sprint's bands, especially when it comes time to build out 5G networks. But frankly, we can't see any scenario under which Deutsche Telekom would give up control of a merged Sprint-T-Mobile. So until the next round of merger talks pop up, it seems that a deal between the two wireless operators is dead. 

Investors are reacting to the report with Sprint's shares down 7% and T-Mobile's shares off 4.5% one hour before the closing bell.

source: NikkeiAsianReview

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17 Comments

1. toukale

Posts: 599; Member since: Jun 10, 2015

rejoice, this is a win for us consumers.

3. TeriusRose

Posts: 108; Member since: May 12, 2017

The people who are pro oligopoly honestly blow my mind. It's like they want to be screwed over.

6. Arch_Fiend

Posts: 3938; Member since: Oct 03, 2015

Why? If John Legere and Deutsche Telekom were to be in charge of the merged company I would have called that a win for consumers but now it's mostly a loss for those on sprint.

9. Dmoney101685

Posts: 10; Member since: Oct 30, 2017

History fact Dutch Telecom been trying to ditch T-Mobile for a long time. Even when T-Mobile started to make profits. Unfortunately T-Mobile still owes it's parent company allot of money. Realistic Fact. Sprint owns the most spectrum out of all carriers. Sprint also owes it's parent Company money as well. Even though it had similar prices to TMobile. The gains it been making lately is no where near as T-Mobile. It might be set up for future 5G and beyond but falling behind on marketing. Realistic Fact. T-MOBILE is moving up in the world. Money wise it be a long time before they can become a very good profitability at this rate. Think about them cutting all the fees that use to generate money for them and deals with Netflix got to cost a pretty penny. It's going to need allot more money to keep it up. Realistic Fact. Softbank is one the world biggest companies and got their hands in almost everything. It has the capital to buy out Dutch Telecom ownership of T-MOBILE and pay off everything it owes. My opinion I can see John ledger being in charge of the combination company and softbank being a majority stake holders. John knows how to market to us with effective results. Sprint has the spectrum to make the new combine company the absolutely best network ever. Softbank can be the money behind it all and let the new combine company run it self. Which is what it did with Sprint. Dutch Telecom can finally get out the American economy as it been trying to do.

10. Arch_Fiend

Posts: 3938; Member since: Oct 03, 2015

Replace my earlier statement with Softbank then lol, John being CEO of the merged company is really the only thing that matters.

16. TeriusRose

Posts: 108; Member since: May 12, 2017

That argument is kinda making the assumption that he would remain the head of the company indefinitely, or that whoever replaces him at some point would share his views. There is no garutneee whatsoever of that. IMHO, T-Mobile, AT & T, Verizon & Sprint need to be broke up. Same deal with multiple other industries. Oligopolies don't really lead to tons of innovation & competiton, it's the exact opposite. T Mobile is an outlier, that's literally the entire reason we all think it's awesome.

7. Dr.Phil

Posts: 2248; Member since: Feb 14, 2011

It still may not be a complete win. Sprint is in need of some desperate improvements to it's network and pricing. And if Sprint were to ever go bankrupt, then you're looking at there just being 3 main carriers either way. It's going to need some kind of investment coming in to help build up it's infrastructure if it wants to continue to be competitive. I foresee a possible merger with a cable company or even a tech company in order to achieve this goal. I don't think they're going to get anywhere without some kind of serious investment.

8. cncrim

Posts: 1554; Member since: Aug 15, 2011

Sprint will never go belly up. Comcast, Google, Warner and heck maybe Apple herself and many more company are wait for discount. So no way it belly up.

2. Rampage_Taco

Posts: 996; Member since: Jan 17, 2017

Because Softbank and Sprint really have the power to try and be the head of the new potential company...

14. Dmoney101685

Posts: 10; Member since: Oct 30, 2017

Softbank does

15. Rampage_Taco

Posts: 996; Member since: Jan 17, 2017

They already showed they can't properly manage a US Telecom company, why would they deserve more power

4. erolva35

Posts: 20; Member since: Oct 18, 2017

T-Mobile definitely doesn't need Sprint as much as Sprint needs T-Mobile.

5. trojan_horse

Posts: 5868; Member since: May 06, 2016

For the time being, yeah... But when 5G shall begin to roll out, you'll see how much T-Mobile needed Sprint.

12. Doakie

Posts: 2465; Member since: May 06, 2009

Ugh. Sprint has been horrible for the whole last decade. They're not going to get better because their management is not up to the task to making a competitive company.

11. tyger11

Posts: 282; Member since: Oct 29, 2012

Crap.

13. Doakie

Posts: 2465; Member since: May 06, 2009

Good riddance Sprint. That combined company would suck so bad. Too many people influxed into T-Mobile's network would have brought it to it's knees, Sprints network is garbage so they would have to migrate everyone off it until TMobile got it working properly. No thanks.

17. Beholder88

Posts: 86; Member since: Mar 30, 2012

Sprint isn't likely to be able to survive on their own. With this deal down the crapper they're going to be faced with some harsh decisions in the not too distant future. They may be forced to sell off some of that precious unused spectrum they are holding on to, or start slashing their workforce. Softbank has a breaking point somewhere, and if the financials don't start turning around there will come a time when they say enough is enough. They'll end up selling them off, or looking at another merger. Allowing Sprint to go too much lower will eventually leave it as a shell of it's former self, to the point where Verizon or AT&T buying them wouldn't turn any heads.

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