T-Mobile and Sprint are still in talks to merge into one company that can better compete with Verizon and AT&T. According to the latest report out of CNBC, the talks are moving forward, however some shareholders are not too happy with the deal price for the merger, which is said to be a stock-for-stock deal. According to recent reports, the deal is said to be at market price, which means there's no premium being paid by Sprint. Allowing Sprint to pay as little as possible to keep Deutsche Telekom happy, and possibly on-board to approve the deal. Of course, nothing is official just yet, so these reports could turn out to be false.
T-Mobile, its parent company Deutsche Telekom as well as Sprint and its parent company SoftBank, have been in talks to merge for a few months now – ever since the FCC quiet period ended following the Incentive Auction earlier this year. The two companies are still looking to merge, even though they are in vastly different positions compared to a few years ago when the two initially started talks of merging – only to be shot down by regulators. With T-Mobile actually being the larger carrier now. Word is that Deutsche Telekom wants to keep the largest stake in the combined company, and that is making things tricky for SoftBank, as its CEO and Sprint's chairman, Masayoshi Son wants to be able to call the shots. So we could end up with Deutsche Telekom having the larger stake, but only by a small amount.
Now whether this merger happens or not will likely be squarely in the regulators court. Regulators did turn down an AT&T acquisition of T-Mobile in 2011, which ultimately ended up with AT&T forking over a ton of cash and spectrum to T-Mobile. Which helped the magenta carrier improve its network and become the Un-carrier it is today. So Sprint and SoftBank are talking with regulators to make sure that a deal could be approved, before announcing a deal – as there would be a breakup-fee if it falls through. Obviously Verizon and AT&T are opposed on this merger, as it would give them more competition, even though the combined company would still be the third largest carrier. We should be hearing more about this proposed merger in the next few weeks and months.