The two American telecoms giants, T-Mobile and Sprint, are allegedly in talks to conduct a merge, following a similar attempt earlier on in the year. It is unknown currently whether the US Department of Justice would allow the third and fourth biggest telecoms companies to merge. This is because of potential rejection by the anti trust regulators, as the US may not wish to decrease the amount of major telecom providers from four to three.
The parent companies of both providers, Deutsche Telekom and SoftBank respectively, have been talking about the merge where Deutsche Telekom would become the majority shareholder for months. Talks initially took place earlier in the year but fell through, only to be picked up again recently. The deal is still weeks away from being finalized and may even be entirely dropped at any time. It’s relevant to point out that during the summer, Sprint looked to acquire Charter, a cable company. It seems they are looking to expand in one way or another.
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It is also interesting to note that earlier in the year, Masayoshi Son indicated his wish to sell Sprint and both companies were talking, but talks eventually fell through. Initially Sprint wished to purchase T-Mobile three years ago, but that was shot down by anti trust regulators. The FCC and US Department of Justice sent out strong warnings in 2014 to Verizon, AT&T, T-Mobile and Sprint that they do not want any merges between those four as a result. Now under the Trump administration, it may be possible for a merger between two of these companies.
Both companies have agreed that John Legere, Chief Executive of T-Mobile, would lead the combined company if the deal goes through. Note that key requirements, such as stock swap ratio have not even been determined yet.
We’ll be keeping an eye out, but what are your thoughts? Some experts say this may help decrease costs in future, especially when rolling out 5G. We hope to see a benefit for the consumer come out of this.
Source: CNBC Source: Reuters
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