T-Mobile And Sprint Reportedly Close To Sealing Merger Deal To Shakeup Wireless Market
For what feels like the millionth time, T-Mobile and Sprint are reportedly once again in talks about a possible merger, and this time it sounds like they're actually making progress. It's said the two wireless carriers might even come to terms on a deal as early as next week, though we have learned that it when comes to these two companies, merger talks can fall apart at any moment, as they've done in the past.
Nevertheless, negotiations are ongoing. Should T-Mobile and Sprint ultimately decide to join forces, they would create a wireless juggernaut with 127 million customers. That would still put the company behind Verizon and AT&T, which have an estimated 150 million and 141 million customers, respectively, but it sure would make things a whole heck of a lot more competitive. As it stands, T-Mobile has roughly half the subscribers as AT&T (No. 2) and Verizon (No. 1), and Sprint has around a third as many.
The timing of the potential deal comes as all four wireless carriers are in a race to build out and implement their next generation 5G wireless networks. It will still be a long while before 5G is even close to being ubiquitous, but efforts are currently underway toward a much faster wireless future.
Part of the negotiation is centered on voting control within the new combined company. Deutsche Telekom owns a greater than 63 percent stake in T-Mobile, while Japan's SoftBank owns an 84.7 percent stake in Sprint. It's not clear how much power either one would yield if the two wireless carriers were to join forces. They're also said to be finalizing debt packages to fund the deal.
While it sounds like a deal is likely to happen, it's not the first time the two have come close to merging before pulling out. It happened in November of last year.
"The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders. However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record," T-Mobile CEO John Legere said at the time.
Sprint CEO Marcelo Claure issued a similar statement, essentially saying there would have been a benefit in merging, but that acceptable terms just couldn't be reached.
"While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination. However, we have agreed that it is best to move forward on our own. We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth," Claure said.
Neither CEO left out the possibility of renewing talks. Whether they can hammer out a deal this time around, however, we'll just have to wait and see.
Thumbnail and Top Image Source: Facebook via John Legere