Sprint and T-Mobile have both confirmed that the two wireless carriers have ended months of internal discussions to merge their companies. Both of them issued their own press releases announcing that the mergers talk have stopped on Saturday afternoon. This was the first time both companies have admitted that they were in talks to merge, following months of unconfirmed rumors that such a deal was in discussion.
In the last couple of weeks, rumors claimed that the merger talks were close to a conclusion. However, a few days ago, a new report claimed that Sprint’s parent company, SoftBank Group, didn’t want to proceed after all. The report added that Softbank and T-Mobile’s parent Deutsche Telekom were unable to agree on which company should own which percentage of the merged organization. T-Mobile reportedly put a new offer on the table in an effort to salvage the deal, but Saturday’s announcement indicated that offer was too little, too late.
T-Mobile put a new offer on the table in an effort to salvage the deal, but Saturday's announcement indicated that offer was too little, too late.
In a press release on Saturday, T-Mobile CEO John Legere admitted that the prospect of the third and fourth largest wireless carriers in the US combining their efforts “has been compelling for a variety of reasons”. We suspect that the main reason is T-Mobile sees a merger with Sprint as a quick way to gain ground on the nation’s two biggest wireless carriers, Verizon and AT&T. Sprint currently has 54 million wireless customers, while T-Mobile claims 70.7 million subscribers. Despite recent customer increases, both carriers are still well behind their two main rivals. Verizon is still number one with 147 million wireless customers, and second place AT&T currently has 138.8 million customers.
However, Legere added that even though a Sprint/T-Mobile merger might have a lot of potential, the company felt that any such deal would also have to offer a better value for T-Mobile’s shareholders versus going at it alone. Legere said that T-Mobile will “continue disrupting this industry” on its own. In its own press release, Sprint President and CEO Marcelo Claure said that the carrier looks forward to “continuing to take the fight to the duopoly and newly emerging competitors”. He also hinted that Sprint might make deals with other companies in the future, saying that it believes “significant opportunities exist to establish strong partnerships across multiple industries.”
Of course, it’s more than possible that these merger talks could happen once again. Sprint tried to buy T-Mobile in 2014, and even announced the terms of the deal, but ultimately it felt apart. Would you like to see Sprint and T-Mobile team up?