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

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

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57 Comments

1. Totse2k15

Posts: 474; Member since: Feb 11, 2014

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

32. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 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.

41. SuperAndroidEvo

Posts: 4888; Member since: Apr 15, 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!

42. DonkeySauce

Posts: 194; Member since: Dec 03, 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

46. rdaex

Posts: 152; Member since: Oct 24, 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!

2. MartyK

Posts: 1043; Member since: Apr 11, 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.

3. blackberry_Boy

Posts: 213; Member since: May 27, 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

4. 0xFFFF

Posts: 3806; Member since: Apr 16, 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.

6. Miracles

Posts: 560; Member since: Aug 31, 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).

7. Arte-8800

Posts: 4562; Member since: Mar 13, 2014

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

36. Jeradiah3

Posts: 1149; Member since: Feb 11, 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

10. youlookfoolish

Posts: 191; Member since: Dec 14, 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.

34. Miracles

Posts: 560; Member since: Aug 31, 2013

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

17. networkdood

Posts: 6330; Member since: Mar 31, 2010

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

38. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 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.

51. corporateJP

Posts: 2458; Member since: Nov 28, 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.

5. youlookfoolish

Posts: 191; Member since: Dec 14, 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.

8. 0xFFFF

Posts: 3806; Member since: Apr 16, 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?

9. youlookfoolish

Posts: 191; Member since: Dec 14, 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.

18. networkdood

Posts: 6330; Member since: Mar 31, 2010

Open mouth and insert foot...

24. networkdood

Posts: 6330; Member since: Mar 31, 2010

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

13. Canaan

Posts: 351; Member since: May 25, 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?

23. networkdood

Posts: 6330; Member since: Mar 31, 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....

26. quesoesgrande

Posts: 217; Member since: Aug 03, 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!

31. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Wait a minute - there aren't any!* -T-Mobile customer

11. wrm2013

Posts: 230; Member since: Mar 28, 2013

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

19. networkdood

Posts: 6330; Member since: Mar 31, 2010

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

27. engineer-1701d unregistered

no you won't its too much money

12. eman99

Posts: 409; Member since: Aug 03, 2010

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

28. engineer-1701d unregistered

amen for people with sprint

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