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‘Sprint and T-Mobile relaunch talks’
Posted on Thursday, 12 April 2018 09:31
T-Mobile US and Sprint are said to be rekindling talks regarding a merger after discussions fell apart last year, recent media reports suggested.
One of the first to comment on the matter was the Wall Street Journal (WSJ), which cited people familiar with the situation as saying the two wireless carriers are exploring a combination for the third time in four years and, while it is unclear what terms are being negotiated, and a potential deal could still fall apart.
The latest discussions are at a preliminary stage, these sources observed, adding the news comes as the US government is in an antitrust fight with telecommunication giant AT&T.
A possible merger of the two has previously run into difficulties, including being rejected by the Obama administration in 2014, as it was said four national providers ensures more choices and lower prices for customers.
The WSJ reported that it is unclear what reception the deal will receive from the Trump administration, which, despite loosening regulations under the Federal Communications Commission, has also sued to block AT&T’s proposed USD 85.00 billion takeover of Time Warner.
Discussions between Sprint and T-Mobile US are complicated by their ownerships as Japan’s Softbank controls 85.0 per cent of former, while Deutsche Telekom of Germany owns the latter, which is said to be the larger business of the two.
Together, should a combination go ahead, they would have nearly 100.00 million customers, putting it ahead of AT&T, with 93.00 million subscribers at the end of 2017, but behind Verizon Communications (116.00 million).
People familiar with the matter also spoke with the Financial Times and added while the two are not close to reaching a deal, they are keen to find a way to come together to create a wireless telecommunications firm with a market capitalisation of USD 80.00 billion.
According to the paper’s sources, Softbank is said to have prompted Sprint to relaunch talks with T-Mobile US as it is under pressure to revive its fortunes.
Shares in the Japanese conglomerate rose 5.0 per cent on reports regarding the potential combination.
The last time a merger was discussed between Sprint and T-Mobile US, the two could not agree on who would control the business, causing the previous courtship to fall apart five months ago.
© Zephus Ltd