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T-Mobile and Sprint merger could be back on the table
It seemed like Sprint and T-Mobile were finally going to join forces earlier this week before it was reported that Sprint’s parent company, SoftBank Group, wanted to call it off. Seemingly, Softbank Group and T-Mobile’s owner Deutsche Telekom were unable to agree on the ownership ratio for the partnership. Given its greater userbase, T-Mobile likely wants the larger stake.
It was speculated that Softbank would seek to end negotiations earlier this week, but, according to The Wall Street Journal, T-Mobile has a new offer on the table that Sprint is considering. The Wall Street Journal, citing people familiar with the offer, said that T-Mobile CEO John Legere (seen above) and Sprint CEO Marcelo Claure met on Wednesday, where Legere reiterated that Deutsche Telekom didn’t want the deal to fall apart.
T-Mobile has allegedly now made a new proposal, the terms of which aren’t known, and it’s said that a deal could be a reached within weeks (though it’s not the first time we’ve heard that this particular partnership was close to being settled).
Sprint and T-Mobile currently lag behind AT&T and Verizon in US subscribers, and they’d fall short even when combined (based on recent figures from Fierce Wireless). By banding together, the two companies would nonetheless stand a greater chance of penetrating the current duopoly, with a combined subscriber base of around 122 million compared to AT&T’s estimated 136 million and Verizon’s 147 million users. What’s more, T-Mobile and Sprint would each lose a competitor — meaning they would no longer have to resort to desperate attempts to outdo one another.
Possibly the biggest implication of the move relates to mobile data, however. Wireless data speed and coverage are going to play an increasing role in the mobile sphere, particularly as we approach the 5G era. T-Mobile invested heavily in mobile data infrastructure earlier this year, while Sprint is also making plans for its 5G introduction in 2019. The merger could go a long way to improving the perception of their data networks, which many still see as inferior to those of AT&T and Verizon.