SoftBank and Sprint tipped to buy T-Mobile in June; combined carrier to be run by Legere?

SoftBank and Sprint tipped to buy T-Mobile in June; combined carrier to be run by Legere?
It has been awhile since we last heard anything on the long rumored Sprint acquisition of T-Mobile. Considering the disdain that U.S. regulators have shown for this deal, we figured that SoftBank and Sprint had given up. Throw in the aggressive pro-consumer moves made by T-Mobile, and we figured that Sprint didn't want to deal with a company that was shaking things up in the mobile industry. After all, Sprint CEO Dan Heese seems as buttoned down as they come, the complete opposite of Legere's outspoken nature.

According to a report published on Wednesday, Sprint CFO Joe Euteneuer and Treasurer Greg Block met with some big Wall Street banks (not the kind that give away toasters) to press ahead with financing of a Sprint purchase of T-Mobile. Six banks were asked to be ready to lend a rather large sum of money to the nation's third largest carrier so that it could buy the nation's fourth largest carrier. A bid could be made as soon as June.

While things are moving ahead on the financing part of the deal, SoftBank Chairman Masayoshi Son is said to be working on arguments to show the FCC and FTC just how necessary this acquisition is. What the two regulatory agencies fear is that with T-Mobile gone, a carrier that has been extremely pro-consumer would disappear. To counter that fear, T-Mobile CEO John Legere is supposedly at the top of the short list of executives that would run a combined Sprint-T-Mobile. And while some have grown tired of his antics, most still consider him to be a breath of fresh air in an industry that can get pretty staid at times.

For the record, 67% of T-Mobile is owned by Germany's Deutsche Telekom. Which ever firm gets this block of stock, gets T-Mobile. Sprint is 78% owned by Japan's SoftBank. The latest rumor is that Deutsche Telekom wants as much cash for its block of T-Mobile stock, as opposed to more paper like shares or bonds. Son has yet to decide how to proceed, but whatever debt is amassed by SoftBank to make this deal happen, would be added to the $8.7 billion owed by T-Mobile.

source: Bloomberg

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53 Comments

45. skymitch89

Posts: 1453; Member since: Nov 05, 2010

If Softbank buys T-Mobile, that doesn't necessarily mean that Sprint & T-Mobile will become one company. Softbank could choose to keep the two companies separate (at least for now) and "rake in" the profits from both.

43. mike2959

Posts: 700; Member since: Oct 08, 2011

Somehow we're all brain washed that we need to have multiple carrier's to have lower prices by thinking that competition always lowers prices, which is not true. Example, deregulation of the electric utility industry, the bill hasn't lowered! Really... The US has tons of carrier's anyways with MVNO, it's all BS...

51. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

Reminds me that most loanshark paycheck lending places are now owned by the big banks. Everywhere you turn, you find the big boys running one scam or another...

42. phonetekmek

Posts: 70; Member since: Oct 04, 2013

I am amoung the growing number who despises his antics. I will admit that he found a way to get people to not want subsidized phones. That is only good for the corporations. Customers are now paying full price for phones and people are happy about. Dumbest thing I've seen , but he managed to do it. Dan Hesse has led Sprint through all the mistakes of his predacessors and I think should be the head of the new company.

44. Augustine

Posts: 1043; Member since: Sep 28, 2013

Those who can't do math are quite happy with subsidized phones.

46. youlookfoolish

Posts: 193; Member since: Dec 14, 2012

This is an asinine comment. I can't stand Legere and think it's hilarious T-Mobile is losing money hand over fist even when adding subscribers (that are mostly prepaid.) but why should a service provider eat a subsidy and not offer the choice of a lower rate plan? This is a similar attitude to ignorant consumers who walk into a service provider store and scream at the helpless ground level employee that the service provider sold them a bad phone. They don't have a clue about the difference between service provider and manufacturer. Don't like prices on handsets but always want the newest tech? Blame the manufacturer you fool. The only one playing fair was Motorola and much like T-Mobile they keep getting sold or spun off.

41. corporateJP

Posts: 2458; Member since: Nov 28, 2009

Carry on, my wayward Son...

39. atlvideoguy

Posts: 75; Member since: Feb 24, 2012

No merger, Sprint Should go after us cellular! I had Sprint for 2 1/2 years and they suck at coverage, data speeds, and customer service. Since switching to t-mobile I have not had dropped called at my house and I have had data speeds between 15-31mbps. Let dish network buy t-mobile before sprint and softbank.

37. youlookfoolish

Posts: 193; Member since: Dec 14, 2012

T-Mobile added 1.3 million net postpaid customers in Q1 of 2014. Crushing Verizon, AT&T and Sprint together.. And still lost millions of dollars. Passionate fan boys over marketing don't understand the business side where T-Mobile still can't turn a profit with customer adds. T-Mobile still has 7 million post paid customers less than Sprint! The cheap and prepaid crowd don't make a business sustainable. Legere is a pop culture face. Great, it makes people passionate. But honestly I'd be terrified of him running Softbank's new combined company.

36. OldNorseBruin

Posts: 235; Member since: Mar 12, 2013

FTC should NOT let this happen for the same reason SPRINT argued against the AT&T's ( wishful thinking!) buyout of T-MOBILE: "It'll KILL competition! " SPRINT, go back to Kansas or your new home of WAR CRIMINAL Japan,; and figure out how to run a 3G network first!

33. medicci37

Posts: 1361; Member since: Nov 19, 2011

& stop whining like a little bitch about how Sprint can't compete :'(

32. medicci37

Posts: 1361; Member since: Nov 19, 2011

Hey Son, focus on not being the worst major carrier out there & give consumers a reason to sign with Sprint.

31. tokuzumi

Posts: 2031; Member since: Aug 27, 2009

Not sure how I feel about this. Maybe if the Sprint name disappeared, or changed altogether (kind of like EE, which was a joint venture between two other carriers). The name Sprint doesn't have a positive connotation. And the venture should do everything it can to kill off the CDMA network. While CDMA isn't a bad network tech, it's locked down to whatever phones manufacturers decide to make for them. Why not just switch over to GSM, and then Sprint customers will have access to whatever phone they want, instead of what I see on every phone message board "Will this phone come to my carrier?" But, if Softbank wants to buy T-Mobile and absorb it into Sprint, this will be a failed venture.

53. thunder18

Posts: 156; Member since: Aug 06, 2009

CDMA vs. GSM will no longer be a factor if they can move to voice over LTE quickly.

30. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

FCC should stop this merger, just as they did with the AT&T and T-Mobile. We need more competition, not less. Furthermore, since we are on the subject. Maybe is too late, but the merger between Comcast & TW, also should be stopped.

27. uncfan44

Posts: 9; Member since: Apr 24, 2013

Few thoughts based on comments i've read. first someone said something about a foreign company buying tmo (if im understanding your point correctly). tmo is already owned in large by a foreign company so this is nothing new. to another point saying son has done nothing with sprint; thats not really true. service has gotten worse this is true, but it has to get worse in order for it to get better. the network upgrades are paying off, tho they are coming at a snails pace. customers are defecting at a large rate, but sprint knew this going into it. last quarter they had their best quarter in 7 years in terms of cash, so something is going well. im no sprint fan at all, actually love what tmo is doing and their CEO is hilarious, but with proper vision over the next couple years and they will be poised to make a splash. i am EXTREMELY in favor of a sprintmo company. they would finally have the purchasing power, when combined with softbank customers, to get good pricing on phones. also son is extremely hungry to become the worlds largest internet provider, and setting high goals usually isnt a bad thing. shoot for the moon and you'll at least end up in the stars. Hesse was a great turn around CEO, now we need Legere for growth!!! sorry post was long and jumped around haha

23. tigermcm

Posts: 861; Member since: Sep 02, 2009

um the FCC and DOJ did not say flat out they would not approve that's why Son is still pursuing this

25. alouden unregistered

No, they are "highly skeptical" of such a deal. They like the idea of four major carriers and are worried about the landscapre that results when four are reduced to three.

40. corporateJP

Posts: 2458; Member since: Nov 28, 2009

Dish could potentially help to change their minds on this, however, but it's a long shot.

22. alouden unregistered

So the fact that the FTC and FCC are against the deal makes no never mind to Mr. Son? I wish he would give it up. If the deal does happen I would have no choice but to leave. No one can convince me that after such a deal, the T-mobile I have grown to like will stay the same. There would have to be changes.

16. zachattack

Posts: 621; Member since: Jul 31, 2013

Phone arena always has the best ugly face pics of this guy, it's pretty hilarious

20. snowgator

Posts: 3630; Member since: Jan 19, 2011

They always did with former Microsoft CEO Steve Ballmer as well. Man, these pictures are all about timing, ain't they? ;-D

15. Elfmonster unregistered

Merger: 1a) The rich get richer.

50. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

1b) The customers get screwed harder.

14. nycezwl

Posts: 15; Member since: Oct 19, 2011

Sorry guys computer shut down! Don't forget AT&T & T-Mobile merger!!! oh yeah and 36 billions or was it more. This is not like a big corporation buying another corporation (usually people don't feel an effect). How do you think USA regulators are going to look at this "a foreign company is buying another telecommunications company" if I'm not mistaken their some laws about that.

11. albie1937

Posts: 23; Member since: Feb 05, 2012

Wall Street will get its way with this merger. Son has 5 top Wall Street banks ready. Those banks have lobbyists knee deep on Capitol Hill and best believe this merger will go thru. Too much money to be made with this merger and Wall Street is NOT GOING to let this slip thru their hands.

12. nycezwl

Posts: 15; Member since: Oct 19, 2011

Don't forget AT&T & T-Mobile merger!!! oh yeah and 36 billions or was it more. This is not like a big corporation buying another corporation (usually people don't feel an effect

13. Augustine

Posts: 1043; Member since: Sep 28, 2013

You nailed it! The federal government and its 3-letter minions take orders from Wall St. We're done over; no more mister nice guy.

8. retronig

Posts: 23; Member since: Nov 21, 2013

Why has Softbank not done anything to make sprint a better carrier???? Yet they wanna acquire Tmo???? Son needs to worry about the company he already purchased before adding another one. I bet if he did purchase it they wouldn't do anything like they have done with sprint. If anything sprint has become worse and the amount of people canceling service proves that. Son leave tmo alone and concern yourself about the company you already have.

28. DonkeySauce

Posts: 194; Member since: Dec 03, 2011

What a lot of people don't realize is that Sprint's network has drastically improved in tons of areas all over the country, but there's still a lot of work to do. The big problem is overcoming the reputation caused by the years of below par network service. Sprint's network could turn into the absolute best overnight, but people would still be trashing it in these comments for a year or more because that's what they're used to. So improving the network is only half the battle, then word has to spread. With what I've seen coming around the bend and the progress made in certain markets, I am convinced that within a year, Sprint will have an incredible network on par or exceeding the quality of Verizon's, albeit a smaller rural footprint.

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