Sprint and T-Mobile (and Softbank and Deutsche Telekom) are said to be in final talks for a Sprint/T-Mobile merger

softbank

Love it or hate it, it is seemingly more and more likely that a merger between the nation’s third and fourth largest cell phone carriers is inevitable. According to news that broke last night, Sprint and T-Mobile are in the end stages of finalizing a merger agreement that will see Deutsche Telekom give up most of its 67% stake in T-Mobile. Japan’s Softbank, which currently owns around 80% of Sprint, is said to be preparing a deal worth about $31 billion to acquire most of T-Mobile US, while still leaving around 15% in the hands of Deutsche Telekom.

Softbank and Sprint will offer about half of the $31 billion in cash, and the other half in stock. According to sources familiar with the matter, a deal could be announced as early as next month.

Depending on who you talk to, the deal would only have a 10-30% chance of gaining regulatory approval. The FCC has already made clear that it prefers four strong mobile carriers in the US, although Softbank argues that Sprint and T-Mobile can’t be effective competitors on their own. Combining the two companies would still put subscriber counts lower than AT&T’s 116 million.

T-Mobile is said to be requesting a break up fee of $1-3 billion in case the deal falls through. Additionally, several details still need to be worked out, including who the management team for the newly combined company will be. John Legere is said to be a top choice, while Dan Hesse has signaled his willingness to step down. Additionally, since Deutsche Telekom does want to keep a small stake in the company, some sources claim that it wants the T-Mobile name and brand to live on, which would mean Sprint could be phased out.

What do you think of the deal? I’m starting to come around and accept it, although I’m still not ready to jump with joy. What about you?

[Bloomberg]
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John F

John was the editor-in-chief at Pocketables. His articles generally focus on all things Google, including Chrome and Android, although his love of new gadgets and technology doesn't stop there. His current arsenal includes the Nexus 6 by Motorola, the 2013 Nexus 7 by ASUS, the Nexus 9 by HTC, the LG G Watch, and the Chromebook Pixel, among others.