Even though the FCC and the Justice Department feel a T-Mobile and Sprint merger would deprive the market of a competitor, it seems that the ball has nonetheless begun to roll. According to a report by Japanese publication Kyodo, T-Mobile’s parent company, Deutsche Telekom, has agreed to sell the the nation’s fourth-largest carrier to Sprint’s parent company, SoftBank, one of Japan’s largest telecommunications companies.
According to the Kyodo’s industry sources, Softbank Chairman Masayoshi Son met with top executives from T-Mobile and Deutsche Telekom in mid-May to propose a buyout, with the meeting apparently being “positive.” The site claims that the meeting went so well that SoftBank’s offer to buy Deutsche Telekom’s controlling stake in T-Mobile’s U.S. arm has been accepted.
While this doesn’t mean a buyout is certain, SoftBank has been at it for some time. Back in December 2013, a report surfaced that SoftBank was in the final stages of talks with Deutsche Telekom to purchase a majority of shares in T-Mobile through Sprint. Most recently, in April, it was reported that Sprint was in the process of securing financing that would fund a bid to purchase T-Mobile. According to Kyodo, SoftBank is expected to make a formal bid either in June or July.
If SoftBank does decide to go forward with a buyout, it should make sure to look at what happened when AT&T tried to do the same thing. The carrier failed to purchase T-Mobile back in 2011, which resulted in AT&T not only entering a seven-year 3G roaming deal with T-Mobile, but also paying Deutsche Telekom $4 billion. We’ll have to wait and see if SoftBank will suffer a similar fate.