Sprint planning 2014 T-Mobile takeover bid worth over $20B, report says

Posted:
in General Discussion edited January 2014
U.S. carrier Sprint is said to be looking into the purchase of rival provider T-Mobile USA, which, if successful, would leave the nation dominated by only three major telecoms.

Sprint-T-Mo


According to people familiar with the matter, the nation's third-largest wireless carrier is looking to put in a bid for fourth-largest T-Mobile, reports The Wall Street Journal.

The sources further claim Sprint is in the early stages of examining regulatory hurdles to the purported buy as it looks toward launching a bid in the first half of 2014. Depending on the stake Sprint attempts to buy, the deal could run upwards of $20 billion.

Sprint Chart


Looking at revenue for the nine months ending in September, a Sprint/T-Mobile consolidation could create a strong competitor to now-dominant Verizon and AT&T. As seen above, combined revenues for the third- and fourth-place telcos amounted to $35.8 billion over the nine-month period, compared to AT&T's roughly $45 billion and more than $51 billion for Verizon.

The success of Sprint's rumored takeover is already on shaky ground, however, as AT&T is still licking its wounds from a failed merger attempt just two years ago.

Interestingly, at the time, Sprint vehemently disagreed with the two companies' joining, to the point where it filed a formal petition with the FCC. AT&T's proposal was set at $39 billion.

Reportedly behind the T-Mobile takeover is Masayoshi Son, chief executive of Japan's SoftBank, which in July officially closed out a deal for controlling interest in Sprint. Son is known as an aggressive businessman and has expanded his communications technology empire through a series of acquisitions and takeovers.

The Journal further reports that Deutsche Telekom, current majority owners of T-Mobile USA, is mulling an exit from the U.S. market.

In all, a Sprint-T-Mobile fusion would bring together 53 million post-paid subscribers, compared to AT&T's 72 million and Verizon's 95 million.
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Comments

  • Reply 1 of 72

    Being a current T-Mobile customer, I would seriously consider switching to AT&T or Verizon if this happens.  Sprint had its time in my area, and that time has passed -- hence the move to T-Mobile.  I'm not interested in giving them any more of my money.

  • Reply 2 of 72
    If AT&T was not good enough, US Gov., why should Sprint be any better?
  • Reply 3 of 72
    tundraboytundraboy Posts: 1,611member
    Seems to me, based on how well the two companies have been managed of late, it should be T-Mobile taking over Sprint wiith Sprint augmenting T-Mobile's GSM network and subscription model rather than the other way around.

    Sprint seems to have been just one bungle after another ever since they took over Nextel and maybe even before that. T-Mobile on the other hand came out of the aborted AT&T merger totally inspired and rejuvenated. (The billion dollar disengagement fee and the additional frequencies from AT&T didn't hurt either.)
  • Reply 4 of 72

    Just what we need, fewer telecoms to compete.

  • Reply 5 of 72
    Both the DoJ and the FCC have already expressed that they don't want any of the Big 4 Mobile Carriers merging. For a company like Sprint, who is having a slow rollout of their LTE network, that along with how many current and former subscribers' complaints of how badly they're run from top to bottom, to possibly acquire T-Mobile, a company who has had a great year for 2013, this would be a nightmare for many consumers! Please have both the DoJ and the FCC intervene to block this possible acquisition immediately! In the meantime, let's find a way to start a petition to block this acquisition. God knows that Softbank's CEO will not stop at making a large bid!
  • Reply 6 of 72
    tundraboy wrote: »
    Seems to me, based on how well the two companies have been managed of late, it should be T-Mobile taking over Sprint wiith Sprint augmenting T-Mobile's GSM network and subscription model rather than the other way around.

    Sprint seems to have been just one bungle after another ever since they took over Nextel and maybe even before that. T-Mobile on the other hand came out of the aborted AT&T merger totally inspired and rejuvenated. (The billion dollar disengagement fee and the additional frequencies from AT&T didn't hurt either.)
    tundraboy wrote: »
    Seems to me, based on how well the two companies have been managed of late, it should be T-Mobile taking over Sprint wiith Sprint augmenting T-Mobile's GSM network and subscription model rather than the other way around.

    Sprint seems to have been just one bungle after another ever since they took over Nextel and maybe even before that. T-Mobile on the other hand came out of the aborted AT&T merger totally inspired and rejuvenated. (The billion dollar disengagement fee and the additional frequencies from AT&T didn't hurt either.)

    Don't talk about the network if you do not know what is really going on. Have you heard of network vision and do you know that sprint was acquired by SoftBank who had loads of money. Also when they acquired clearwire that made sprint have more sprectrum than all the other carriers combined. This deal is highly unikely any way because sprint is cdma and AT&T is gsm. Running two networks is very expensive that's why they rid of Nextel and used their low frequency band to enhance their coverage.
  • Reply 7 of 72

    What does a CDMA carrier want with a GSM carrier? That sounds like a headache in the making.

  • Reply 8 of 72
    rgroves wrote: »

    Don't talk about the network if you do not know what is really going on. Have you heard of network vision and do you know that sprint was acquired by SoftBank who had loads of money. Also when they acquired clearwire that made sprint have more sprectrum than all the other carriers combined. This deal is highly unikely any way because sprint is cdma and AT&T is gsm. Running two networks is very expensive that's why they rid of Nextel and used their low frequency band to enhance their coverage.

    Blah blah blah. Here's my take:
    As a former Sprint customer who left for T-mobile: No. Sprint needs to be taken out back, shot between the proverbial eyes, and then its assets divided into tiny pieces and sold off at auction.
  • Reply 9 of 72
    Blah blah blah. Here's my take:
    As a former Sprint customer who left for T-mobile: No. Sprint needs to be taken out back, shot between the proverbial eyes, and then its assets divided into tiny pieces and sold off at auction.

    What you're not understanding is that sprints a different network they replaced the backhaul and have 3 bands. 800 mhz for in building coverage and it travels much farther. 1900 which is their basic band and 2500 which has been shown to pass 1 gb per second download . Not to mention unlimited data with faster speeds than AT&T and Verizon.
  • Reply 10 of 72
    Quote:

    Originally Posted by Tallest Skil View Post

     

    Just what we need, fewer telecoms to compete.


     

    Perfect time for Apple to buy T-mobile. :p

  • Reply 11 of 72
    I like the idea because i assume that the DOJ and FCC will block the deal and Sprint has to pay T-Mobile $1billion break up fee and some frequencies. They seem to have too much of both.
  • Reply 12 of 72
    tundraboytundraboy Posts: 1,611member
    Quote:
    Originally Posted by rgroves View Post







    Don't talk about the network if you do not know what is really going on. Have you heard of network vision and do you know that sprint was acquired by SoftBank who had loads of money. Also when they acquired clearwire that made sprint have more sprectrum than all the other carriers combined. This deal is highly unikely any way because sprint is cdma and AT&T is gsm. Running two networks is very expensive that's why they rid of Nextel and used their low frequency band to enhance their coverage.

     

    Oh, I know all about that.  What I meant was Sprint will have to go GSM rather than T-Mo going CDMA.  In a sense Sprint will augment T-Mo as their frequencies will be added to T-Mo's.  And I agree that this deal is unlikely because of the cost of shifting a network to another standard/protocol although SoftBank's ambitions might conquer those misgivings.

  • Reply 13 of 72

    Ugh. This reminds me why I insisted on going with an unlocked phone and no-contract wireless plan. T-Mobile's flexible plan options (and their $30/month prepaid plan with unlimited/5 GB 4G data and 100 voice minutes in particular), were among the main reasons I finally took the plunge and bought an iPhone 5s. If this acquisition goes through and Sprint starts playing games with the plan options to try and milk more out of prepaid customers like me, I'm glad that I have an unlocked phone that I can carry over to another carrier that might value my business more.

     

    IMO, the market is moving more in the direction that T-Mob has laid out. For years, I refused to go with a smartphone because of the telcos' overpriced contracts and complicated subsidies. T-Mobile's offerings over the past year have been very consumer-centric, and they've been adding customers by just simplifying the choices, and making the service more transparent. Yes, their network has more gaps than AT&T or Verizon, but to me it's a worthwhile trade off just to be free of the contractual games that they play.

  • Reply 14 of 72
    tundraboy wrote: »
    Oh, I know all about that.  What I meant was Sprint will have to go GSM rather than T-Mo going CDMA.  In a sense Sprint will augment T-Mo as their frequencies will be added to T-Mo's.  And I agree that this deal is unlikely because of the cost of shifting a network to another standard/protocol although SoftBank's ambitions might conquer those misgivings.

    I'm sure they still have nightmares about Nextel, which was gsm. Why would they put themselves in the same situation even if they have billions. Running two networks is very expensive.
  • Reply 15 of 72
    Quote:
    Originally Posted by Cash907 View Post

     

    What does a CDMA carrier want with a GSM carrier? That sounds like a headache in the making.


     

    when T-Mobile bought MetroPCS earlier this year, it was exactly this, but with the order reversed: What does a GSM carrier [i.e. T-Mobile] want with a CDMA carrier [i.e. MetroPCS]? That sounds like a headache in the making...

     

    Since they merged, The Bigger "they" seems to be "making out" pretty well... :D

  • Reply 16 of 72
    Quote:
    Originally Posted by macm37 View Post



    Both the DoJ and the FCC have already expressed that they don't want any of the Big 4 Mobile Carriers merging. For a company like Sprint, who is having a slow rollout of their LTE network, that along with how many current and former subscribers' complaints of how badly they're run from top to bottom, to possibly acquire T-Mobile, a company who has had a great year for 2013, this would be a nightmare for many consumers! Please have both the DoJ and the FCC intervene to block this possible acquisition immediately! In the meantime, let's find a way to start a petition to block this acquisition. God knows that Softbank's CEO will not stop at making a large bid!

    I also recall the DoJ indicating that they would like to see four competing major telcos.  The part that doesn't add up is why T-Mobile's value in this potential merger is roughly half of what it was with the unsuccessful AT&T merger.  And why would T-Mobile be valued less than Nextel at the time of their merger with Sprint?  Is this just a case of T-Mobile's stock getting pounded, thus making them an attractive takeover target now that their finances are on the upswing?

     

    No question T-Mobile had a great year, and I think their "uncarrier" approach has resonated with consumers. Sprint has multiple issues, but has a parent company that seems more eager to break the bank than T-Mobile's.  My main concern is whether Sprint would try to mold T-Mobile back into a contract-centric service, with the same opaque and confusing options that the other telcos offer. 

     

    IMO, having a triopoly of AT&T/Verizon/Sprint dominating the U.S. wireless market would be a disaster for consumers.  T-Mobile has already moved the needle to some extent.  For example, I doubt that AT&T would have announced their reduced off-contract pricing tiers if not for T-Mobile going to no-contract plans.  I don't know if it's applicable, but Canada has an existing triopoly with wireless service and those companies effectively move in lock-step (ironically, they're heavily lobbying to keep Verizon from entering the Canadian market as a potential 4th national player).  Would a combined Sprint/T-Mobile continue making the disruptive moves that T-Mobile has made?  If the answer is no, then this merger absolutely should be blocked. 

  • Reply 17 of 72

    Please, no! Sprint, ATT and Verizon are part of the problem!

  • Reply 18 of 72
    I'm a current - and VERY dissatisfied - Sprint customer. I liked Nextel, and very foolishly continued with Sprint after that contract expired.

    Currently, Sprint has ZERO 4G coverage in Sacramento, CA, where I live. And apparently, no plan to build any. I'll be jumping to AT&T soon, I think.
  • Reply 19 of 72
    rgroves wrote: »
    What you're not understanding is that sprints a different network they replaced the backhaul and have 3 bands. 800 mhz for in building coverage and it travels much farther. 1900 which is their basic band and 2500 which has been shown to pass 1 gb per second download . Not to mention unlimited data with faster speeds than AT&T and Verizon.
    Yet it still drops my calls in Los Angeles, not to mention very limited LTE!!! We're in Los Angeles people, WTF! Oh and let's not forget they were bought out by that [email protected]%#ing TOOL who keeps playing games with Apple! I say switch to T-Mobile and boycott the douche!
  • Reply 20 of 72
    tbelltbell Posts: 3,146member
    Quote:
    Originally Posted by SpamSandwich View Post

     

     

    Perfect time for Apple to buy T-mobile. :p


     

    Sure if Apple doesn't want to sell any phones on any body else's network.  
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