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Is it over? Sprint and T-Mobile may not merge after all

Trevor Mogg
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After months of reports suggesting Sprint was working to acquire T-Mobile, any plans for a deal are reportedly now off.

People familiar with the situation have told the Wall Street Journal that Sprint and parent company SoftBank decided to ditch its attempt to buy America’s fourth largest wireless carrier because it felt it was unlikely to get the green light from regulators.

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Sprint is expected to make an official announcement outlining its position some time on Wednesday.

According to the Journal’s sources, Sprint’s decision to abandon its plans to buy Deutsche Telekom-owned T-Mobile has nothing to do with Iliad’s unexpected $15 billion bid for 56 percent of the company last week. A number of reports suggest that offer has been rejected by T-Mobile, though the two companies are apparently currently in talks to find a way forward.

It’s believed SoftBank was willing to pay as much as $32 billion for T-Mobile in a cash and stock swap deal.

Related: French company Iliad makes $15 billion bid for T-Mobile

For months it was thought that Japan-based SoftBank was looking to merge T-Mobile with Sprint in a deal that would’ve created a U.S.-based carrier with somewhere in the region of 100 million subscribers. This would’ve placed it just behind the country’s two biggest players, AT&T and Verizon, each of which has about 110 million subscribers.

Sprint’s reported decision to end its pursuit of T-Mobile is likely partially caused by the 2011 decision of the US Federal Communications Commission and Department of Justice that ended AT&T’s plan to acquire T-Mobile for $39 billion. The regulators concluded that a further reduction in the number of carriers would limit choice for consumers and lead to higher prices.

More recent talks between SoftBank and regulators appear to have persuaded the Sprint owner to finally abandon its plans, believing the regulatory hurdles to be simply too high.

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Trevor Mogg
Trevor Mogg
Contributing Editor
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