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Softbank Hoping for More Discussions in a Potential Sprint/T-Mobile Merger

June 17, 2014 - Written By Alexander Maxham

Since the Sprint/T-Mobile merger was first talked about back in December, many of us have thought that the FCC would never approve it. And that includes me. Seeing as the FCC denied AT&T’s bid to buy T-Mobile a few years ago, it would be difficult to see Sprint buying up T-Mobile. Sure they are the two smaller carriers, but that would still leave us with only three national carriers instead of four. Which the FCC has said many times that they want more competition and not less, in the wireless industry. But that hasn’t stopped Softbank CEO, Masayoshi Son from trying to get the FCC on board with this deal. He, and Sprint’s CEO Dan Hesse, are still pretty optimistic and hoping the deal would be approved, even though no deal is official just yet.

We’ve heard rumors that Softbank and Deutsche Telekom have a deal in place that has not been announced yet. Which would see Softbank paying about $40 per share, valuing the company at about $32 billion. In this deal, Softbank would own 51% of T-Mobile, and DT would still own about 15% of the company. Not only would this bring T-Mobile customers over to Sprint, but MetroPCS customers as well. It’s important to remember that the deal is not yet official, and we have also heard that if the deal gets denied by the FCC, that T-Mobile would get about $2 billion in a break-up fee. That’s even more than what they got from AT&T a few years ago, although they also got spectrum from that deal.

Son has been lobbying in Washington for months now, trying to persuade the FCC and Department of Justice into thinking that this is a good idea for consumers and the US. One of his points is that we pay the most for cellular service and get the slowest speeds. Which is absolutely correct. Our speeds here are pretty slow compared to other countries. In fact, Korea just launched a few 225mbps networks on LTE-Advanced. Hopefully Masayoshi Son can do that over here though. It’ll take time, but it would be nice.