Mobile and Sprint move closer to merging

by Lawrence Cooper September 25, 2017, 0:08
Mobile and Sprint move closer to merging

Will a T-Mobile & Sprint merger be the next big thing in the wireless market?

The two companies rose earlier this week on news of the possible merger. FTC regulations prevented a merger of this nature then, due to competitive concerns; that has paid off particularly well for T-Mobile which has now gone from being the weaker party to the dominant force of the merger.

T-Mobile and Sprint's on-again, off-again merger talks may be nearing a conclusion. Sprint owner SoftBank would own 40-to-50 percent of the combined company, Reuters reported, while T-Mobile owner Deutsche Telekom would have a majority stake. Sources now believe that "the US antitrust enforcement environment has become more favorable since the companies abandoned their previous effort to combine in 2014".

The third and fourth biggest wireless carriers in the USA would combine for about 130 million users - putting them on par with Verizon and AT&T.

But Trump and T Mobile's chief executive officer, John Legere, have feuded publicly since 2015. The combined company would reportedly have a base of 130 million subscribers, and a merger would allow the combined company to massively cut costs.

Sprint's Japanese parent company SoftBank Group Corp.

AT&T is in the process of getting its own transformative deal, its $85.4 billion acquisition of media conglomerate Time Warner approved by USA regulators. The U.S. Department of Justice ultimately blocked the deal because it would "substantially lessen competition" in the wireless industry.

T-Mobile and Sprint will likely tout planned investments in 5G and their network that would create jobs, though combining operations would also lead to layoffs, said Roger Entner, an analyst at Recon Analytics.

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