Sprint and T-Mobile end merger negotiations

Steve Phelps
November 5, 2017

Sprint Corp (S.N) and T-Mobile US Inc (TMUS.O) said on Saturday they have called off merger talks to create a stronger USA wireless to rival market leaders, leaving No. 4 provider Sprint to engineer a turnaround on its own. The two companies have said they hoped to find a way of merging to make the wireless market more competitive.

T-Mobile CEO John Legere also said there were benefits to consolidating, but added that, "we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile's shareholders".

Sprint CEO Marcelo Claure said that even though the companies could not reach a deal, "we certainly recognize the benefits of scale through a potential combination".

T-Mobile is a better position than Sprint as a standalone company, analysts have said.

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But none of those rumors were confirmed by the companies' chief executives. The company had eyed the Deutsche Telekom company as a way to grow its own footprint in the USA and take on the two big carriers in the nation, AT&T and Verizon. "We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth".

Last week, reports surfaced that SoftBank, the Japanese conglomerate that controls Sprint, was planning to end talks with T-Mobile, whose parent is Deutsche Telekom. Claure, the Sprint CEO, is also a member of SoftBank's board.

The long-sought merger reportedly fell apart because SoftBank was unhappy with the latest terms, which would have given Deutsche Telekom majority ownership of both carriers. The tone of the release suggests T-Mobile and Sprint are still on pleasant enough terms, so it's not unthinkable to imagine the two to partnering in some capacity in the future.

The companies expected to have a better shot at the merger this year under the Trump administration.

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