SoftBank Renews Interest In Sprint Merger With T
- Author: Terrell Bush Feb 18, 2017,
Feb 18, 2017, 0:24
Both T-Mobile and Sprint's stock prices were on the rise Friday afternoon following a Reuters report that Japan's SoftBank Group Corp was preparing to cede control of Sprint Corp to Deutsche Telekom, bolstering the possibility of a long speculated T-Mobile-Sprint merger. SoftBank, which owns about 83 percent of Overland Park, Kansas-based Sprint, walked away from discussions regarding the carrier acquiring T-Mobile in 2014 after facing opposition from USA antitrust regulators. This could make things unfair for other companies in the auction, so the two will have to wait until after the auction finishes in April.
Sprint actually abandoned plans to merge with T-Mobile once before because the FCC was expected to make the deal hard, if at all possible.
With T-Mobile's success in the last few years, Deutsche Telekom's Chief has shared they won't consider giving up a majority of T-Mobile. The CEOs of SoftBank and Sprint have expressed interest in doing a deal, and T-Mobile CEO John Legere has said that a merger with Sprint is "one of many potential future outcomes" of T-Mobile working to continue growing.
Softbank, Sprint and Deutsche Telekom did not immediately respond to requests for comment.
There still may be roadblocks in regards to antitrust issues for a possible merger, yet the benefits could be well worth the effort as carriers will need to invest significant resources into 5G networks in the coming years and Sprint and T-Mobile face stiff competition from the USA frontrunners Verizon and AT&T. The investment is actually from the SoftBank Vision Fund and was announced in October. And forthcoming fifth-generation wireless upgrades, or 5G, are expected to cost billions of dollars.
Sprint and T-Mobile have both had trouble competing with Verizon and AT&T, and that's largely because Verizon and AT&T are twice the size of both carriers.
"We may buy, we may sell".