A Sprint/T-Mobile Merger May Not be A Done Deal Under Trump

When SoftBank bought a controlling stake in Sprint back in 2013, the original plan was to then purchase T-Mobile USA and merge the two companies. SoftBank CEO, Masayoshi Son believed that this was going to allow the two companies (as a combined company) to better compete with AT&T and Verizon, whom both have more than double the subscribers of T-Mobile and Sprint. However, regulators did not agree. And through many meetings, the FCC and US Department of Justice told Sprint and SoftBank executives that they would block such a merger. They then decided that they would wait for the new FCC to take office in January 2017, when the new president takes office, which we now know is going to be Donald Trump, and that raises quite a few questions.

Analysts at Cowen and Company Equity Research don't believe that a merger between the two is certain, under a Trump administration. Trump, even before he won the election, had vowed to block AT&T's acquisition of Time Warner. But he hasn't said much, during the campaign season or since winning the election, about wireless consolidation. The two FCC advisors he has already named, seem to be in favor of less regulation, as far as the wireless carriers are concerned. Stating that the FCC should really only regulate spectrum. In a note to investors, Paul Gallant a Policy Analyst for Cowen TMT (technology, media and telecommunications) noted that early signs during the Trump transition "indicate benefits to cable/telcos, ISPs and media companies via less regulation." Gallant continued by stating that it is "also possible Trump's previous lack of TMT policy positions, populism and lack of Department of Justice clarity inject a degree of uncertainty including M&A as we think about AT&T/Time Warner and Sprint/T-Mobile." Additionally, Gallant is saying the likeliness of a Sprint acquisition of T-Mobile under the Trump administration is around 50%.

Analysts can debate all they want about Sprint purchasing T-Mobile and the two merging into one company, but before that happens, SoftBank and Deutsche Telekom will need to come together to ink a deal. Back in late 2013 when Sprint was looking to purchase the carrier, T-Mobile was a very different company. They were just beginning their turnaround under CEO John Legere who had only been running the company, at that point, for about a year. Deutsche Telekom was still wanting to get out of the US and quick. However now, three years later, it's a much different story. T-Mobile US is actually the subsidiary of Deutsche Telekom that is making the most money for them. Which means their sale price will be much higher, and possibly higher than SoftBank can afford, or want to spend. So there are still plenty of factors in play in a potential Sprint and T-Mobile merger here, even under a new president and administration.

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Alexander Maxham

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Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]
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