WSJ: T-Mobile and Sprint restart preliminary merger talks

WSJ: T-Mobile and Sprint restart preliminary merger talks
Once again, America's favorite two love birds are talking marriage five months after their seemingly inevitable trip to the altar was halted. We are talking about T-Mobile and Sprint. The third and fourth largest U.S. carriers, respectively, have been discussing a merger several times over the last few years. Previous attempts to combine the two had been shot down by regulators (back in 2014), and the most recent attempt failed when both firms couldn't agree on the terms of a deal. After talks were officially ended in November of last year, Sprint CEO Marcelo Claure said that despite the inability of T-Mobile and Sprint to reach an agreement, both carriers see the benefits to a deal.

T-Mobile, which has become the most innovative and fastest growing wireless operator in the states under the leadership of president and CEO John Legere, was said to be interested in Sprint's hoard of high-frequency 2.5GHz spectrum. T-Mobile has been building out its 4G LTE network with the use of the low-frequency 600MHz airwaves it won last year in an FCC auction. While low-frequency spectrum travels farther and penetrates buildings better, T-Mobile was reportedly considering the 2.5GHz spectrum to help it build its 5G network.

A combined T-Mobile-Sprint would have approximately 100 million subscribers, which would allow the new firm to leapfrog over AT&T and become the second largest U.S. carrier after Verizon. While there is no guarantee that these talks, characterized as "preliminary," will lead to a merger, Sprint's shares surged 17% today to $6.01. The stock of T-Mobile is up 5.39% to $62.96.

Japan's SoftBank owns 85% of Sprint; the company's founder and CEO, Masayoshi Son, was reluctant last year to give up a large chunk of the carrier in any deal with T-Mobile. He also thought that he would be able to merge the weaker Sprint with the much stronger T-Mobile, and walk away with control of the merged company. German telecom giant Deutsche Telekom controls 65% of T-Mobile. Both sides last year supposedly agreed that a combined T-Mobile-Sprint would be majority owned by Deutsche Telekom, and run by T-Mobile's Legere, who has done an amazing job turning T-Mobile into a well known brand.

Will T-Mobile and Sprint finally exchange wedding vows? For this to happen, it seems that SoftBank's Son is going to have to take a realistic look at what he owns here. If Sprint has nothing to improve its current standing in the industry, this is a deal that needs to get done.

source: WSJ

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17 Comments

1. fatTony

Posts: 115; Member since: Dec 20, 2012

Sign of desperation?

2. joseg81

Posts: 204; Member since: Jul 15, 2011

kinda feels like it on sprint's side. after calling it off last year why come back to it? just do it and get it over with. maybe pride is getting in the way since they wouldn't have much control after t-mobile takes over.

3. torr310

Posts: 1667; Member since: Oct 27, 2011

Could be great thing if the coverages increase a lot closer to Verizon!

9. phoneguy

Posts: 213; Member since: Jan 08, 2009

Tmobiles coverage alone smokes Verizon. If you havent used Tmobile in a while it would be hard to know.

11. benzb

Posts: 81; Member since: Jan 19, 2012

That’s a tough statement. I have both in Los Angeles and there are places where T-Mobile has no service and Verizon has full reception. It all comes down to where you are at.

12. Allday28

Posts: 339; Member since: Nov 19, 2010

You do realize that both sprint and T-mobile have states with zero coverage right?

15. cdgoin

Posts: 614; Member since: Jul 28, 2010

In the countryside Tmo has greatly improved.. BUT Verizon still has MUCH better coverage outside metro areas. As a Tmo customer for about 16 years trust me on that one at least in Virginia.

4. Eclectech

Posts: 355; Member since: May 01, 2013

I have mixed feelings about this, as a former longtime Sprint customer and current T-Mobile customer. I'd hate to see Sprint go away as there would be less competition in the industry which would lead to higher prices for everyone. I'd much rather see Sprint build out their 5G and turn things around for themselves, while T-Mobile continues to grow organically.

7. tyger11

Posts: 292; Member since: Oct 29, 2012

Nobody competes with Sprint other than low-cost regional carriers. This merger would force Verizon and AT&T to lower their prices, which would be great.

5. Foxgabanna

Posts: 607; Member since: Sep 11, 2016

Real people who want coverage are with AT&T or Verizon.

6. Dr.Phil

Posts: 2427; Member since: Feb 14, 2011

I switched from AT&T to T-Mobile and I can tell you the coverage increased a lot. Both in speed and the amount of bars in various locations. OpenSignal says the top two in terms of 4G availability and coverage are T-Mobile and Verizon. https://opensignal.com/blog/2018/03/15/the-4g-battle-continues-between-t-mobile-and-verizon/

16. cdgoin

Posts: 614; Member since: Jul 28, 2010

I agree T-mobile for the most part in the rural areas is way better than AT&T.. Verizon is still champ in that aspect though, just due to the fact they got there first years ago.

8. gamehead unregistered

Dont know how to feel about this

13. irossdrummer

Posts: 369; Member since: Jan 17, 2015

This would be great for me because I'm on Sprint wanting to move to Tmobile lol

14. blkatfirstsight

Posts: 39; Member since: Mar 05, 2018

The only fear I have with this merger as I have with several other merger talks about these two is that Sprint will somehow take control over T-Mobile and my service will be trash.

17. Sparkxster

Posts: 1238; Member since: Mar 31, 2017

This merger will be good for the wireless industry as long as TMobile is in control of the merged company. If they merge then US Cellular will be the new number 4 carrier.

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