Report: T-Mobile & Sprint Agree Basic Merger Conditions

T-Mobile and Sprint have settled on their basic merger conditions but still haven't concluded their tie-up negotiations, The Wall Street Journal reported on Wednesday, citing people familiar with the talks. Insiders close to the two wireless carriers said that the parties agreed to Deutsche Telekom controlling the consolidated entity and T-Mobile Chief Executive Officer John Legere being appointed to lead the hypothetical telecom giant that would be created by combining the third and fourth largest mobile service provider in the United States by subscriber count. Mr. Legere would still answer to the Board of Directors chaired by DT CEO Tim Höttges and Sprint founder and Chairman Masayoshi Son, according to the same sources.

While the two companies were expected to formalize their merger intentions alongside their consolidated financial reports for the third quarter of 2017 (second quarter of Sprint's fiscal year), their announcement was delayed and is now expected to arrive by mid-November. The final details that are being drafted by the wireless carriers include network and general business consolidation plans, as well as related arguments for making such moves that they'll have to present to regulators and various advocacy groups opposing the deal. The question whether the two will pursue a merger has now definitely been answered and the two telecom firms are presently working together to identify the optimal manner in which to present their proposal to Washington as any major consolidation in the wireless segment is likely to raise heavy antitrust concerns even among the current Republican administration that's more open to such tie-ups than the Obama-led White House was, recent reports suggest.

Sprint and T-Mobile also agreed on a breakup clause after pondering whether to pursue it for some time, but the provision itself is said to be highly unconventional and warrant no cash exchanges hands in case regulators prevent the merger from happening. In that scenario, T-Mobile agreed to sign a roaming deal with Sprint that would be extremely beneficial to the latter and allow it to use the Bellevue, Washington-based company's cell towers in areas where it's presently not offering any coverage at low rates, insiders claim. Both T-Mobile and Sprint posted solid financials earlier this week and decided against holding traditional earnings calls with investors and analysts, likely in order to avoid any questions about their upcoming tie-up attempt.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]