Mobile Sprint merger may be saved with last minute compromise

Mobile Sprint merger may be saved with last minute compromise

Lindsey Duncan
November 6, 2017

Reports from Japan earlier in the week claimed SoftBank, which owns Sprint, is set to pull the plug on a rumoured merger with Deutsche Telekom's T-Mobile over a dispute about who would control the combined company.

This isn't the first time Sprint has tried to acquire T-Mobile, and it may not be the last.

The failed merger could also keep wireless prices low as all four providers have been heavily discounting their cellphone plans in a battle for consumers.

With merger talk officially through, that means T-Mobile and Sprint will have to revisit their position in a marketplace where Verizon and AT&T dwarf their wireless subscriber totals.

Both companies jointly said they couldn't strike mutually agreeable terms. Its wide portfolio and clout have made it a good fit to own and operate Sprint from above thus far, though that was not always the case; at one point, Masayoshi Son was very open about the fact that the company was losing money thanks to Sprint.

Analysts said an end to talks to T-Mobile would leave debt-laden Sprint without the scale needed to invest in its network and to compete in a saturated market.

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The Wall Street Journal reports that T-Mobile and its parent company Deutsche Telekom have tweaked their offer, though the exact terms remain unclear.

Both companies had expressed interest in a tie-up this year.

Deutsche Telekom, which has toyed with options for its USA business for years, put a courageous face on the unravelling of the deal on Saturday night, saying T-Mobile would continue its successful growth strategy.

It comes as SoftBank said on Thursday it has secured a 2.65 trillion yen ($23.3 billion) senior loan agreement to refinance acquisition loans for Sprint Corp and British chip designer ARM.

The two companies have been dancing around a possible merger for years, and were again in the news in recent weeks with talks of coming together after all. What can the next era of T-Mobile and Sprint do to gain ground?