Now that the government spectrum auction is over, people familiar with the matter say that Sprint and T-Mobile have started preliminary talks about a possible merger.
This isn’t the first time we are seeing possible consolidation rumors regarding T-Mobile and Sprint, the third and the fourth largest US carriers respectively. The only difference is that back in 2014, Sprint was interested in acquiring T-Mobile, not the other way around. However, since then, the magenta network has launched a series of “Uncarrier” initiatives, which helped its value soar to a whopping $55 billion. Sprint, on the other hand, has had trouble retaining customers despite its relatively affordable plans.
SoftBank’s Chairman Masayoshi Son has already expressed his interest in reinitiating discussions about consolidation on May 10 during a press event in Tokyo.
All merger talks were temporarily put on hold due to the government spectrum auction that ended recently, and after almost a year of silence, it looks like the two carriers are ready for another conversation. People familiar with the matter claim that Sprint – as well as its largest shareholder, SoftBank – have started premilinary talks with T-Mobile and its owner Deutsche Telekom about a possible merger. SoftBank’s Chairman Masayoshi Son has already expressed his interest in reinitiating discussions about consolidation on May 10 during a press event in Tokyo, so now the decision is up to Deutsche Telekom and US regulators.
Despite T-Mobile’s growth over the past few years, it’s unclear whether it is even interested in acquiring Sprint.
Merger talks were met with heavy criticism and regulatory scrutiny during the Obama administration; now all eyes are on Trump’s administration. Donald Trump has previously stated that he wasn’t convinced about AT&T and Time Warner’s deal, so even if Deutsche Telekom agrees to acquire Sprint, there may be regulatory hurdles to cross. We will have to see where these preliminary conversations take us, but despite T-Mobile’s growth over the past few years, it’s unclear whether it is even interested in acquiring Sprint.
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