Sprint to end merger negotiations with T-Mobile, report says

AppleInsider · October 30, 2017 10:48PM

U.S. wireless carrier Sprint's parent company, SoftBank Group, is reportedly looking to back out of merger talks with T-Mobile after company executives raised concerns over losing control of the resulting entity.

Citing sources familiar with the matter, Nikkei reports SoftBank will propose a halt to merger negotiations on Tuesday, a move that could quash plans to integrate America's third- and fourth-largest cellular providers.

According to the source, SoftBank held a meeting last Friday to discuss the current agreement, which granted T-Mobile parent Deutsche Telekom a controlling interest in the combined entity. SoftBank was initially responsive to the terms, but executives urged CEO Masayoshi Son to reconsider ceding control of one of one of its largest assets, Reuters reports.

Multiple reports claim T-Mobile owner Deutsche Telekom negotiated to own a majority stake of the combined company, leaving SoftBank with a minority share between 40 and 50 percent.

If the deal falls apart, it will mark SoftBank's second failure to join the two telcos. The Japanese technology giant attempted to purchase T-Mobile in 2014, but opposition by government regulators prompted SoftBank to scrap the deal. Antitrust watchdogs squashed a similar bid for T-Mobile by AT&T in 2011.

SoftBank has been keen to challenge Verizon and AT&T's duopoly over the U.S. wireless industry. Though it has been gaining subscribers, T-Mobile is still lags behind No. 2 AT&T, and Sprint is in an even weaker position. A merger would not only bolster the firms' combined customer base, but allow the new entity to conduct more efficient network investments.

The turn of events comes after rumors earlier this month suggested a tie-up was all but complete. Sprint and T-Mobile had agreed on major facets of the merger deal and were working toward a potential announcement in time for earnings at the end of October, Bloomberg reported at the time. The publication noted that an announcement would likely be pushed back to November, as the companies were still hammering out final details.

fallenjt · October 30, 2017 10:54PM

Sprint will die on its own, anyway.

seanismorris · October 30, 2017 11:25PM

Sprint is terrible.

There is not a single way that Sprint is better than T-Mobile. Not even in price of services.

The only thing of value that Sprint has is Spectrum licenses. T-Mobile is better off buying whatever they need in preparation for 5G than taking on Sprints debt.

I’ve used both networks in the past 2 months.

The one area T-Mobile is inferior to their larger rivals is coverage. Verizon still has better coverage in smaller communities, and out in “no where”. But in the past 5 years T-Mobile has significantly closed the gap. (Also from personal experience)

Price wise T-Mobile is the best value. I didn’t find Sprint cheaper, do to “bait and switch” pricing. Verizon is more expensive, but depending on where you live it may be worth it.

I have no experience with ATT, they see to be mainly targeting businesses until recently (with the DirecTV purchase).

The deal with Sprint falling through is the best thing that could have happened. Hopefully will allow them to continue to push their rivals on price.

longpath · October 30, 2017 11:45PM

seanismorris said:

Price wise T-Mobile is the best value. I didn’t find Sprint cheaper, do to “bait and switch” pricing. Verizon is more expensive, but depending on where you live it may be worth it.

I have no experience with ATT, they see to be mainly targeting businesses until recently (with the DirecTV purchase).

I agree that T-Mobile is the best value. Based on both my personal experience and the experience of a friend of mine in DHS, Verizon has been atrocious at handling overseas roaming, whereas ATT handled that well; but T-Mobile handles it even better, and at a substantially better price.

SpamSandwich · October 30, 2017 11:50PM

This is not good. Both Sprint and T-Mobile are in bad shape and there's the distinct possibility that one or both will end up going out of business.

cali · October 31, 2017 12:13AM

Mobile we need you....

Please Apple solve all these headaches.

ronn · October 31, 2017 12:47AM

As much as I hate the behemoths, T-Mobile needs to merge with Sprint to become a third phone-corp. If this deal falls through, I can't see myself staying with T-mobile beyond 2018 unless they do something super dramatic to improve coverage and other services in the boonies where I sometimes travel. Hell, there are even pockets here in NYC where they suck. Forget about it when I travel to the Shenandoah valley area. Outside of a few college areas, there is absolutely no coverage still. Been waiting and hoping but that dream died a while ago.

georgie01 · October 31, 2017 1:48AM

I don’t understand this ‘need’ for growth which seems to drive business decisions. Why can’t a company be happily in 3rd place, chugging along with no significant loss or growth. Actually that’s not true, I do understand it. Greed. People grow businesses (like this potential merger) not because of a burning passion for whatever they’re growing into, but because they want more opportunities for money growing. People want T-Mobile to merge with Sprint not because of a burning passion for mobile service providing but firstly because it could make someone(s) more money. This mindset can grow businesses bigger but also can dilute the passion for the product, just to make people richer. Apple’s extremely rare in that they’ve managed success and passion. Maybe not like the ‘old days’, but a lot better than the vast majority of money hungry businesses out there.

Personally I find T-Mobile’s coverage to be very good.

tundraboy · October 31, 2017 2:57AM

This would be like Yugo merging with Honda and demanding that Yugo management retains control. I would cancel my TMo family account in an instant if that ever happened.

tundraboy · October 31, 2017 3:02AM

"SoftBank was initially responsive to the terms, but executives urged CEO Masayoshi Son to reconsider ceding control of one of one of its largest assets, Reuters reports."

Executives looking after their personal interests rather than SoftBank's stockholders'. All they really want are golden parachutes. Bastards....

williamh · October 31, 2017 3:03AM

SpamSandwich said:

This is not good. Both Sprint and T-Mobile are in bad shape and there's the distinct possibility that one or both will end up going out of business.

Why do you say T-Mobile is in bad shape? They seem fine from where I sit (customer and shareholder), Doubled in price in the last year and a P/E that's still not astronomical. Seems to be growing the business. Love the included services. Overseas free text and data . . . T-mobile Tuesdays maybe a bit silly and gimmicky, but did your cell company give you a free sub (twice) or pizza (twice)? Mine did. Glad that the deal fell through.

dysamoria · October 31, 2017 3:43AM

Good. Was no good for anyone but 1%ers.

durandal_1707 · October 31, 2017 5:11AM

ronn said:

As much as I hate the behemoths, T-Mobile needs to merge with Sprint to become a third phone-corp. If this deal falls through, I can't see myself staying with T-mobile beyond 2018 unless they do something super dramatic to improve coverage and other services in the boonies where I sometimes travel.

You mean like buying a massive swath of 600 MHz spectrum covering the entire US including Alaska, Hawaii, and Puerto Rico?

The main reason T-Mobile and Sprint have had more trouble than the behemoths in rural areas is because the behemoths have historically had all of the low-band spectrum. That's changed now.

SpamSandwich · October 31, 2017 1:25PM

williamh said:

SpamSandwich said:

This is not good. Both Sprint and T-Mobile are in bad shape and there's the distinct possibility that one or both will end up going out of business.

Why do you say T-Mobile is in bad shape? They seem fine from where I sit (customer and shareholder), Doubled in price in the last year and a P/E that's still not astronomical. Seems to be growing the business. Love the included services. Overseas free text and data . . . T-mobile Tuesdays maybe a bit silly and gimmicky, but did your cell company give you a free sub (twice) or pizza (twice)? Mine did. Glad that the deal fell through.

In some respects they’ve managed to turn their fortunes around, but to compete against AT&T and Verizon, it’s all about capturing new customers and reducing churn:

http://financials.morningstar.com/ratios/r.html?t=TMUS

jbdragon · October 31, 2017 2:11PM

T-Mobile has been great for me. People also have to realize that they acquired a bunch more bandwidth, and into the lower frequency with better penetrates buildings. But right now I think there's only 1 city and 1 phone that supports the new band. It's going to take a few years to roll out. The new iPhones don't support it. I'm going to assume next year iPhones will, when it'll matter a little more as they should be spreading out more by then.

GeorgeBMac · October 31, 2017 3:13PM

I would just like to see a viable alternative to AT&T and Verizon -- one strong enough to bust the collusion between those two and create some real competition.
... Right now it's sort of Rocky vs Apollo Creed (or David vs Goliath) kind of fight.

Sprint to end merger negotiations with T-Mobile, report says

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