T-Mobile US, Sprint closing in on deal - reports - Mobile World Live

T-Mobile US, Sprint closing in on deal – reports

27 APR 2018

Merger talks between T-Mobile US and Sprint are at an advanced stage and a deal could be in place by next week, potentially putting an end to years of speculation and ushering in a new era for the US mobile market.

T-Mobile’s owner Deutsche Telekom and Sprint’s parent SoftBank have made significant progress since resurrecting talks earlier this month, several reports citing sources close to the matter stated. A prior round of discussions collapsed in November 2017.

Reuters reported this latest round of talks centred on how the parent companies would wield their voting control over a combined operator.

The eventual agreement could see Deutsche Telekom consolidate the combined company within its books, even if it does not own a majority stake, added Reuters. Deutsche Telekom and T-Mobile are also reportedly in the process of finalising a debt financing package.

T-Mobile has fared better than Sprint in recent years, building up its subscriber base and network assets. But GSMA Intelligence figures for Q1 2018 show the operator remains a distant third with an 18 per cent market share compared with 36 per cent for Verizon and AT&T’s 30 per cent.

Sprint held a 12 per cent share at end Q1. The operator holds a long-term debt of more than $32 billion and has struggled to compete in an ever competitive mobile market.

Formidable player
No doubt the proposed tie-up would create a formidable player in the US, with a market capitalisation of more than $80 billion. Perhaps most crucially, a deal will enable the two groups to share the cost of investing in their networks, with next-generation 5G technology on the horizon.

The US is expected to be among the first to commercially launch 5G networks, with AT&T earmarking a mobile launch at the end of this year.

However, sources warned there was still no certainty a deal will be reached. Even if a merger is agreed, it would undoubtedly face regulatory hurdles, as was the case with an attempted tie-up in 2014.

It is unclear at this stage how the Trump administration would react to a merger agreement: notably AT&T’s aquisition of Time Warner was blocked by the Department of Justice over competition concerns and the issue is now being fought out in court.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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