Two of United States’ largest carriers Sprint and T-Mobile are reportedly holding informing talks regarding a potential merger. A Bloomberg report states that the two carriers could potentially become one if the talks, which are actually taking place between Softbank (which is Sprint’s largest shareholder) and Deutsche Telekom (it owns T-Mobile USA) yields fruits.
The two carriers have attempted a merger earlier as well. A few years ago, Sprint’s efforts to acquire T-Mobile failed over concerns that a merger of the two firms would not be approved for competitive reasons. However, the talks seem to have been rekindled for some reason.
Earlier this year, there were reports that Softbank was willing to cede control over Sprint to Deutsche Telecom if it gave the merger its go ahead. However, nothing much came of those talks because the two firms were prevented from communicating with each other due to ongoing airwave auctions. There are no such restrictions in place now though and that could be one reason why there are rumors of the rekindled talks.
Meanwhile, Softbank wiling to give up its control over Sprint is in sharp contrast to a few years ago, when T-Mobile would have been absorbed into the Sprint brand.
A Sprint merger with T-Mobile comes fraught with regulatory risk and won’t be easy to structure. […] A merger proposal would be a major test of the Trump administration’s attitudes to telecommunications mergers at a time when it’s already weighing AT&T Inc.’s $85.4 billion purchase of Time Warner Inc.
Meanwhile, Comcast and Charter are already said to be thinking about attempting a merger and/or acquisition with T-Mobile. Which is why Sprint needs to move forward quickly. The talks are still in early stages though and we will have to wait to see if something comes out of these discussions and whether, the deal receives regulatory approvals.
