Published: Mon, November 06, 2017
Industry | By Faith Ward

Sprint and T-Mobile end merger negotiations

Sprint and T-Mobile end merger negotiations

T-Mobile and Sprint are the US' third- and fourth-largest wireless carriers, respectively, but they are significantly smaller than AT&T and Verizon, who effectively have a duopoly over U.S. wireless service. The fact that they've made official statements about the talks falling through does imply that there's a very slim chance that talks will ever resume, even though both companies know that it will be a game-changer for them.

Reports from Japan earlier in the week claimed SoftBank, which owns Sprint, is set to pull the plug on a rumoured merger with Deutsche Telekom's T-Mobile over a dispute about who would control the combined company.

A united corporation would have had more than 130 million USA subscribers, just behind Verizon Communications Inc (VZ.N) and AT&T Inc (T.N). "However, we have agreed that it is best to move forward on our own", according to Sprint president and CEO and Softbank Board member Marcelo Claure.

Sprint has sought to strengthen its balance sheet by cutting costs and mortgaging a portion of its airwaves and equipment.

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Legere said that T-Mobile has "been out-growing this industry for the last 15 quarters, delivering outstanding value for shareholders, and driving significant change across wireless". The company has also badgered rivals with its unlimited data plans.

Sprint previously abandoned a bid for T-Mobile in 2014 when it became clear that the Obama administration would block the merger in order to preserve the competition created by having four major nationwide carriers. Both Sprint and T-Mobile said they were open to exploring other options.

A source told Reuters in July that SoftBank was considering an acquisition offer for Charter in a deal where it would combine the cable company with Sprint. The two sides could reach a deal within weeks, but the two companies could still fail to agree on deal terms.

Legal experts also said earlier this year that it was hard to predict whether the current administration would be more receptive of a deal.

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