T-Mobile makes Sprint new offer in hopes of saving merger
T-Mobile and Sprint aren’t calling it quits on their potential merger yet despite recent disagreements over which side would have control over the combined company. The Wall Street Journal reports that T-Mobile US has restarted talks by presenting Sprint with a revised offer, and it’s still possible that a deal could be struck “within weeks.” T-Mobile CEO John Legere and Sprint CEO Marcelo Claure spoke on Wednesday, with Legere making it clear that T-Mobile doesn’t want the deal to collapse.
Earlier this week, SoftBank chairman Masayoshi Son reportedly wanted to walk away from negotiations after his shareholders expressed concern about handing over control of Sprint if the merger were successful. Deutsche Telekom would presumably hold a majority stake in a combined T-Mobile/Sprint, but SoftBank has reportedly been exploring ways to guarantee itself a powerful say in the company’s direction.
T-Mobile doesn’t want to give up on this deal
Both carriers skipped their traditional conference calls when reporting quarterly earnings this month; the move was seen as a way to avoid questions about the long-rumored, on-again-off-again merger. Sprint’s board of directors reportedly discussed the situation — and T-Mobile’s newest offer — on Thursday. The Journal cautions that the two sides could still fail to agree on terms that both find acceptable.
T-Mobile and Sprint joining together would dramatically reshape the US mobile industry. If approved by US regulators, the deal would result in a mega-carrier with over 130 million customers. That would position the combined company much closer to the size of rivals Verizon Wireless and AT&T. A successful merger would also reduce the number of major US cellular providers that consumers can choose between from four down to just three. Both T-Mobile and Sprint have priced their smartphone plans more aggressively in recent years to counter the perceived superior network performance advantage of their larger competitors.
Even if the two companies agree on terms, any proposed deal is certain to face intense scrutiny and stir debate among consumers, US lawmakers, and industry groups. It must gain the approval of both the Federal Communications Commission, which will examine whether it benefits consumers and preserves a competitive market, and the Justice Department, which will analyze potential antitrust implications.
President Trump’s position on the matter is unclear. But FCC chairman Ajit Pai, who has made it his mission to loosen and eliminate regulations in the telecom industry, has indicated that he’s not necessarily opposed. “I don’t think any regulator who embraces regulatory humility and intellectual honesty about economics can say whether three or four or five [carriers] is the optimal number,” he said in an interview with Recode’s Tony Romm.
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