Friday, February 17, 2017

Here we go again: Sprint and T-Mobile merger talks may resume

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The merger of two of the nation’s biggest wireless carriers might be in play once again. A new report claims that formal merger talks between Sprint and T-Mobile could begin sometime in April.


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The report comes from Reuters, citing unnamed sources. It claims that SoftBank, the Japanese company that acquired a majority stake in Sprint back in 2013, may be willing to give up its control of the carrier to Deutsche Telekom, the owners of T-Mobile US, in an effort to merge both carriers. SoftBank would still have a minority stake in the merged company under this scenario, but it’s unknown how large or small that share would be.


Officially, talks between the two companies cannot begin until April. The carriers are in the middle of bidding for an airwave auction, and the FCC forbids any chats between competitors until that auction is finished because of its anti-collusion rules.


You may remember that in 2014, Sprint and T-Mobile were in talks to merge, but those plans were scuttled due to anti-trust objections from US regulators. Since then, T-Mobile in the US has been highly successful in adding more customers to its service, thanks to some very aggressive marketing and many different plan changes and promotions. It is now the number three carrier in terms of customers in the US, after overtaking Sprint sometime after the merger talks ended.


So why the new effort to merge Sprint and T-Mobile? For one thing, it’s possible that the new leadership in Washington DC might be more relaxed on regulations compared to the previous administration. Another factor is the effort to spend money to upgrade cellular networks to the upcoming 5G speeds. That will take tens of billions of dollars, and it’s possible that neither Sprint nor T-Mobile could have the amount of cash needed to make that happen as quickly as their main rivals, Verizon and AT&T. A merger could allow them to get more money to handle that task.


Even if such a merger were to be approved, it would likely take a long time for it to officially close, so this won’t be happening anytime soon. How do you feel about the prospect of Sprint and T-Mobile combining their forces? Let us know your feelings in the comments!

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