Last week it was reported that US carriers Sprint and T-Mobile had entered “active talks” about a merger. We’ve been hearing about the possibility for a number of months, though Reuters points out that the two cell providers are inching closer to a deal that could happen sooner than we think.
We told you that we would update you on the status of Sprint and T-Mobile’s ongoing negotiation over a merger, and this week a new report came out that suggests this could indeed happen. The exact words reported by Reuters were that Sprint and T-Mobile are “close to agreeing to tentative terms on a deal.” Turns out, the deal may not have to be as complex as we had originally thought.
For starters, T-Mobile would essentially buy a majority share in Sprint, with the ownership going to Softbank (parent of Sprint). Reuters estimated that the deal would entitle T-Mobile to “between 40 and 50 percent” of the new company. Softbank’s CEO has stated that “he wants a say in how the company is run,” though current leaders are likely to remain in power.
A merger of the two telecommunication companies would require many approvals including the permission of the US government. This would be a real disruption in the market and could have varying effects on the consumers of both cell carriers. We still have our doubts given how long this report has gone on for, but this is most certainly a step in the direction of progress being made. AT&T and Verizon have been put on notice, that in the event something does eventually happen, the market will never be the same. We’ll continue to keep an eye on the situation as we move forward.
SOURCE [Reuters]
