T-Mobile and Sprint have supposedly been in talks to merge for quite a while now. After dropping talks a few years ago, the companies began talking once again after the quiet period following the Incentive Auction ended (carriers were not allowed to talk about potential merger and acquisitions during that time, as it would be unfair to other companies in the auction). Now, talks have gained momentum, and according to Reuters, the two companies – and their parent companies – are close to closing a deal. Obviously, this deal would still need to go to regulators for approval, but if the deal is agreed on, then the four companies have faith that it’ll be approved and not denied like AT&T’s acquisition of T-Mobile.
According to Reuters, who mentioned those familiar with the matter, Sprint’s owner, SoftBank would own around 40 to 50 percent of the new company. While T-Mobile’s owner, Deutsche Telekom would still have a majority stake in the company. That is definitely a big change from a few years ago, where Deutsche Telekom was trying desperately to get out of the US market, and now they are looking to remain in the US. According to these sources that Reuters spoke with, the deal is expected to close by the end of October (that doesn’t include the regulatory review period), but these sources did also warn that talks could still fall through if the two companies are not able to agree to terms.
One rumor that continues to gain momentum in all of the coverage of Sprint and T-Mobile looking to merge is the fact that T-Mobile’s current CEO, John Legere, would lead the combined company. This would be a smart move on behalf of Sprint, T-Mobile and its parent companies, after seeing how Legere has turned T-Mobile around and made it the third largest carrier, bypassing Sprint in the process. This also wouldn’t be surprising, since Deutsche Telekom would have a majority stake in this new company, so it would want to have it’s own CEO in charge of the combined company. If this merger does happen, the new company would have around 130 million customers, which would put them just behind AT&T who has 136.5 million (Verizon has 147.2 million) and allow it to compete with the two a bit more. Which is the entire reason for these two carriers merging in the first place.