T-Mobile Sprint Merger: Magenta CEO Seems To Be Warming Up

There has been much speculation about an imminent T-Mobile Sprint merger ever since it was first rumored that Sprint’s parent company, Softbank, was interested in acquiring the fourth largest U.S. carrier. Earlier this month, T-Mobile CEO John Legere gave off the vibe that the carrier was not interested in being taken over, saying that there was more potential for T-Mobile as an independent player. Last week it was rumored that Softbank has now entered in direct talks with Deutsche Telekom, which owns a controlling stake in T-Mobile U.S., and Legere now seems to be warming up to the idea of a merger.

Legere now holds the view that this merger would play a pivotal role in breaking down what he calls the “duopoly” of Verizon and AT&T. Even if Sprint and T-Mobile merge, their combined subscriber base won’t be able to rival AT&T’s, which happens to be the second largest mobile carrier in the country. He believes that this merger would actually foster a competitive environment for carriers, that it will make sure the two behemoths “don’t use their prowess to crush the little guys and have this sub-1GHz spectrum be moved all to them.” The 600MHz broadcast TV spectrum is set to be auctioned off next year. Softbank is reportedly willing to offer as much as $20 billion for Magenta, and apparently it has been convinced by major financial institutions that financing will be available if a deal is reached. On the other hand, analysts are skeptical, they believe that regulators might block a merger, like they did back in 2011 when AT&T agreed to acquire T-Mobile for $39 billion.

Adnan Farooqui
Categories: General
Tags: Sprint, T-Mobile