SoftBank Examines Connection Between Sprint, T

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Sprint stock was up more than 3% near 9.30 in late-afternoon trading in the stock market today, while T-Mobile stock was up 5%.

Sprint, owned by the Japanese company Softbank, and T-Mobile, owned by German company Deutsche Telekom, are trying to clinch a merger. AT&T (T) also was forced to abandon a $39 billion T-Mobile deal in 2011 as a result of pressure from the Obama administration.

A merger between Sprint and T-Mobile, or even one or both carriers being purchased by another company wouldn't come as a surprise at all, especially because of the new regulatory environment, according to one Sprint partner that requested anonymity.

"Japan's SoftBank Group Corp is prepared to give up control of Sprint Corp to Deutsche Telekom AG's T-Mobile US Inc to clinch a merger of the two USA wireless carriers, according to people familiar with the matter".

Sprint has found itself stagnating in the USA market, and has watched as T-Mobile leapfrogged it to take over the third-place position.

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No talks between SoftBank and Deutsche Telekom are now happening because of the FCC's 600MHz spectrum auction that prevents collusion between competing companies. A combined Sprint and T-Mobile company could spell a lot of trouble for AT&T and Verizon, they would still be third place, but they would have a ton of cash and spectrum at their disposal. And forthcoming fifth-generation wireless upgrades, or 5G, are expected to cost billions of dollars.

This would be the second time Softbank has made an effort to acquire T-Mobile.

SoftBank's CEO Masayoshi Son committed to investing $50B in the US which would create 50,000 jobs after meeting with President Trump last December.

RBC Capital, in a January 29 research note, said the Department of Justice would still veto a Sprint-T-Mobile deal.

While both companies declined any official comment to CNBC, Softbank Chief Executive Masayoshi Son told analysts in February, "We may buy, we may sell".

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