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Wells Fargo: If T-Mobile-Sprint Merger Happens, T-Mobile Likely to be the Buyer

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According to analysts from Wells Fargo, in the event of a merger between carriers T-Mobile and Sprint, the former will likely be the buyer in the transaction. This latest prediction is quite a reversal from what the Wall Street research firm had previously stated back in December of last year. At that time, Wells Fargo had published a note entitled “S/TMUS Merger in a Trump Administration” and it named Sprint and the carrier’s parent company, SoftBank, as the would-be controlling shareholder that would acquire T-Mobile for a sum of $93.4 billion.

But Wells Fargo has since updated its prediction, naming T-Mobile as the buyer instead. This appears to be consistent with what executives from Deutsche Telekom (which owns T-Mobile) have been saying as of late. As reported by Reuters, Tim Hoettges, the chief executive officer of Deutsche Telekom, recently said during an annual shareholder meeting this week that Deutsche Telekom will be dictating the “when, what and how” if and when merger talks happen.

Right now, Deutsche Telekom holds around 65 percent ownership of T-Mobile, and the carrier happens to be DT’s largest profitable subsidiary. In other words, it would be in the best interests of Deutsche Telekom to not give T-Mobile away. Then one must also consider the fact that between the two carriers, T-Mobile is the larger company, with more than 72 million customers compared to Sprint’s 59 million. If they merge, the combined customer base would total around 132 million, which would take them closer to Verizon’s and AT&T’s numbers.

SoftBank came to America several years ago by acquiring Sprint, and part of SoftBank’s original plan back then was to buy T-Mobile as well and merge it with Sprint. That plan never materialized, chiefly because the Federal Communications Commission (FCC) under then President Barack Obama had wanted to keep the Big Four mobile operators in the US (Verizon Wireless, AT&T, T-Mobile, and Sprint) separate, as they currently are. But now under President Donald Trump’s administration, T-Mobile and Sprint can give it another try. And with the incentive auction already over, the two carriers can actually now initiate negotiations, which they were not allowed to do while the auction was still ongoing.


Source: FierceWireless

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42 comments:

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  1. So it looks like Obama saved T-mobile from ruination, all so that Trump could let them be the ones to take the reins.

    Thanks, Obama.

    I'm actually totally ok with this.

    Given how Metro turned out, Sprint will likely be redeemed as a brand a few years after the merger, providing they shutter the network and lay off its incompetent managerial class.

    If there's one thing the Trump presidency has taught America, it's that keeping holdovers will just set you up for intra-organization espionage.

    Gotta clean house, Clinton style.

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    1. haha trump espionage

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    2. We only need to look to our neighbors to the North to see how well a three-network system is working for customers.

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    3. "We only need to look to our neighbors to the North to see how well a three-network system is working for customers."

      Except all else isn't equal.

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    4. "We only need to look to our neighbors to the North to see how well a three-network system is working for customers."

      Dude, we are already there....

      The top 3 carriers in Canada have 90 percent of the customers

      That's not much different from what we have in the US, where the top 3 carriers have 80-plus percent of the customers.

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  2. I still throw Sprint in the trash.

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    1. If they merge I will throw both in the trash.

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    2. If they don't merge, the market is throwing Sprint in the trash anyway...

      Doomed to linger on for a bit like K-Mart, the doddering relic that is like a museum piece of 1985 retail.

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    3. No, once the T-Mobile/Sprint merger is blocked by the FCC, the newly formed Comcast/Charter wireless dynamic duo is destined to acquire Sprint. Unlike the former, the latter will gain FCC approval since it will not eliminate a wireless competitor.

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  3. The Sprint brand is tarnished. In a merger, the Sprint brand will die out.

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    1. Since Sprint has became the new disrupter, that would be very bad for the consumer.

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    2. Sprint is only disrupting itself these days.

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    3. Sprint was a disruptor during the first two or so years of RingPlus.

      Then Cricket took the mantle.

      Now it's Mintsim.

      The real disruptors are and have always been the MVNOs themselves.

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    4. "Sprint was a disruptor during the first two or so years of RingPlus."

      So many dubious assumptions. If you look at the totals of customers of carriers, or just MVNO's, RingPlus hardly registers at all, and it had no influence outside its customer base.

      If you want to say that RingPlus was a disruptor in terms of causing discussions and comments at "Prepaid Phone News" and other phone forums, there I will agree with you for sure!

      As far as being goes, the MVNO's are mere mites flitting among elephants: the world shakes when AT&T and Verizon and now T-Mobile shrug their shoulders, while the mites make little impact. One must look at REAL numbers instead of fanboy bias.

      As far as the claims about Mintsim go, let's see some sort of report to show how many total customers they have gained. I've not seen any yet. So far, all we have is some fanboys saying they are cool and REALLY LIKING THEM A LOT. None of which amounts to taking any mantle or being any sort of "disruptor".

      If it ends up being a mere 1/60th of the total customers as Verizon, then they are disrupting nothing.

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  4. totally oppose to more consolidation, look at what competition has achieved lately...more unlimited and limited plan at lower price. In fact, they should find ways to provide incentives for more MVNOs to compete with the big 4.

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    1. Sprint hasn't been competitive for over a year, since back when they shut down the activation of prepaid phones on RingPlus.

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    2. RingPlus customer totals amounted to next to nothing, so of course Sprint was no more or less competitive before and after any actions related to RingPlus.

      You need to remember that RingPlus mattered in the tiny universe of its fans/customers (and those who discussed it here), but it didn't matter at all out in the real world.

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    3. " In fact, they should find ways to provide incentives for more MVNOs to compete with the big 4."

      No ham-handed "incentives" *cough* corporate welfare needed.

      Just greatly reduce the regulatory burden and overtaxation.

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  5. I have difficutly believing President Trump would allow such a merger, especially if the buyer is a "Telekom" with significant ownership from the Federal Republic of Germany. I just don't see this being allowed.

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    1. The is one time when politics are one-sided.

      The buyout of a failing business will increase Sprint's competitiveness, which will be a boon to mobile customers.

      Only "liberals" (I assume) are invested in faith based beliefs such as two uncompetitive carriers being better than a thriving Tmo that can bust up the duopoly.

      The end result of such misguided thinking is (as usual) shielding corporate giants from real accountability and competition.

      Personally, I'd rather see three or more real competitors than wait for the duopoly to swoop in and crush the still vulnerable little guys.


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    2. "The end result of such misguided thinking is (as usual) shielding corporate giants from real accountability and competition."

      It's called Peronism, or crony capitalism, and is a mild forum of fascism. It is from this that the terrible idea of giving massive taxpayer gifts to banks and the auto industry came from (the "bailouts"). It all boils down to the government stealing from everyone (to the point of massive deficit spending) to give to the wealthy.

      Oddly enough, mainstream Democrats and Republicans both love it, while "Tea Party" types and the hard left both hate it.

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    3. The "auto industry bailout" simply meant US taxpayers paying a European company (Chrysler) to ship US manufacturing jobs to China.

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  6. It will happen . Sprint can't go on much longer losing $. Too bad for us consumers with the loss of a 4th competitor.

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  7. Sprint and TMo competing for customers is what has been driving cellular prices way down, and giving us back "unlimited" plans. Their coverage may be awful, but we all benefit from them existing as competitors. Eliminate one, and prices will climb back up, service will get more restricted, etc. Say goodbye to most MVNOs, like FreedomPop, Tello, etc.

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    1. I've seen no evidence of Sprint competing. The real competition has involved AT&T and Verizon, the only two carriers that still have far better networks (and can meet the needs of the vast majority of the people). T-Mobile is coming on now, but only because it has been significantly improving its coverage.


      Sprint has been doing little more than "polishing a turd" of shuffling plans and prices while doing nothing to improve the situation where the network really only covers a tiny part of the country.

      Eliminate this one, and we lose entertainment value, and little else.

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    2. I'm actually ok with a final end to the Sprint hate.

      Then we can move on to other things.

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    3. Sprint is competing, both directly, and more importantly, through MVNO's. Sprint must survive or competition will be lost. This merger must not be allowed and the government should step in with financing to support Sprint if the need arrives.

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    4. If Sprint was competitive then it wouldn't need corporate welfare.

      If it doesn't survive then it clearly wasn't competitive.

      Preventing the merger would be terribly hypocritical, considering the government ALREADY allowed the Bell Twins™ to buy and merge their way to corporate giant status.

      And to top it all off, since we already know Sprint is at the mercy of an incompetent elitist managerial/investor class, it makes no sense to hold taxpayers indefinitely hostage to these very same retards.

      Heck, if every incompetent business got bailed out, the government would just go bankrupt from giving free handouts to everyone who started an unprofitable lemonade stand.

      But if I don't get a billion dollar bailout for whatever failures I might encounter, then I'll be damned if I accept a doomed company being propped up at taxpayer's expense so that the rich investors don't have to suffer the consequences of huge risks and bad investments...unless every investor has their losses covered by government money so that investments always at least break even.

      In that case, if anyone could hop aboard the gravy train without winners or losers being arbitrarily picked, then I'd be the first one in line for that handout.

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    5. "This merger must not be allowed and the government should step in with financing to support Sprint if the need arrives."

      You assume that the rulers of this nation have this right to meddle thusly in the private affairs of the people. That might work well in Medieval Europe or Soviet Russia, but not so well in our Constitutional republic.

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    6. Safe to ignore this libertarian rant. Sprint has tens of millions of customers, and is getting no corporate welfare. The money is coming from loans or selling asset. SoftBank paid too much for the company and mismanaged it, so they're hoping a sale will be more profitable than operating it as the #4 carrier. Sure the coverage is poor, but so is TMobile's, and they're still growing.
      Sprint is an okay service if you happen to live in an area with strong coverage, and dont travel extensively, and going after those customers, their only option has been to compete on price. Their service area almost completely overlaps with TMobile's, so neither will improve with a merger. They're only interested in buying out Sprint so they can gut a competitor, and once they do, they can jack up their pricing much more, knowing customers have no alternatives left. Sprint's low prices drove the other 3 to keep lowering prices. Sprint's successful MVNO partners pushed the others to allow more and cheaper deals for MVNOs on their networks. Sprint was the only carrier who always maintained unlimited plans (for new sign-ups) on their service, which we've recently seen all other carriers offer, too, because they were losing customers. Even with a lousy network, Sprint (and TMobile) has been a competitive force, improving the situation even for consumers that can't directly use the service.

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    7. "Sprint's low prices drove the other 3 to keep lowering prices"

      A rather dubious assertion, as Sprint doesn't actually compete with the Big 2 (soon to be Big 3). For the vast majority of Americans, it wouldn't matter even if Sprint had 3 TB of data for 8 cents: Sprint's coverage is so poor it won't work.

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  8. SoftBank threw a lot of money in the trash.

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  9. The new environment, with less regulatory barriers from the FCC, FTC and others actually makes it easier for NEW real carriers to form and compete.

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  10. There's a lot of misinformation in the comments here. Let's start with the idea that only Verizon and AT&T serve the majority of the American population, it's just not true. Most of the population live in cities or large towns, which are served by all four national networks (even Sprint). The smaller networks may not cover the most land area in the country but they do cover the majority of the population. Remember the difference. Second, Verizon and AT&T don't compete with each other on price,only Sprint and T-Mobile do that and if one of them goes away the pne that's left won't bother ro compete on price any longer just like Verizon and AT&T. The best outcome we can hope for is for Sprint to be acquired by Dish or one of the cable companies.

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    1. Well, you are sure ADDING to misinformation.

      "Let's start with the idea that only Verizon and AT&T serve the majority of the American population, it's just not true".

      It is quite true, as evidenced by the choices of American customers.

      "The smaller networks may not cover the most land area in the country but they do cover the majority of the population."

      That's "Fake news". We are talking about a MOBILE population. The smaller carriers don't cover enough people in enough of the places they live AND work AND go.

      "Second, Verizon and AT&T don't compete with each other on price,only Sprint and T-Mobile do that "

      Verizon and AT&T do compete with each other on price, and that is where most of the competition is.

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    2. Just because you choose to live in the middle of nowhere doesn't mean most people do. And I've never heard anyone accuse Verizon or AT&T of driving prices down. So maybe you're the one who's been reading too much fake news and can't tell the difference?

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    3. So far all you have done is say things that are the opposite of true.

      And what is true? Verizon and AT&T do a far better job of covering where people live work and play, so they have gotten the Lion's Share of customers. You may call America the "middle of nowhere". But these companies know to cover the country and they make huge profits and get huge success doing so. If you are a good network and cover where people go you will get the customers.

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    4. And the fastest growing operator is T-Mobile.

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    5. "Just because you choose to live in the middle of nowhere doesn't mean most people do"

      Have you heard? It's the mobile phone era. It doesn't matter where you live... unless you are a shut-in. It matters where they go.

      "And the fastest growing operator is T-Mobile."

      Indeed. And they are growing because they are rapidly expanding to cover America, rather than sitting still like Sprint and resting on the useless 1970s-and-before statistics of having phones at home addresses only.

      If T-Mobile thought like the above shut-in who asserts that 80% of America (tthe cities and towns ignored by Sprint and having no coverage) is "no-where", they'd be stuck at 30 million customers instead of 72 million.

      The carriers that do well are those who cover America, not just the few Americans who are afraid to step out of the front door.

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    6. "Just because you choose to live in the middle of nowhere doesn't mean most people do"

      Again, it doesn't matter where people live, it matters where they go (in terms of mobile phones). Look at just one example, the state of Wyoming. A territory completely ignored by Sprint, and deemed as "worthless" and illegitimate by bad-coverage activists.

      Where do people go? 11 million either live in Wyoming or visit it each year. 11 million who need cell coverage and certainly won't get it from Sprint.

      (Or the upper peninsula of Michigan, where millions also need cell coverage. Entirely written off by Sprint, but T-Mobile is moving to cover it all within a couple of years)

      Multiply this by many other entire states and large regions, and you get territories lived in or visited by more than 150+ million people. More than twice as many people as Sprint has customers. A huge proportion of the population that won't ever get Sprint unless maybe it costs next to nothing.

      Yes, Sprint as it is meets the needs of tens of millions, but its service doesn't meet the needs of the vast majority of customers in America.

      It is easy to see how the customer totals reflect the customer's needs. T-Mobile is expanding in Wyoming (and other such territories)... they are moving to cover where Americans use their phones, just like AT&T and Verizon. They are pushing hard to cover 95% of the US from coast to coast. John Legere knows that this expanded coverage is crucial to T-Mobile's survival... why don't you?

      Their greatly increased success is a direct result of this.

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  11. From a survey in 2014, the average American has visited 12 states (which is a larger number than the states that have good Sprint coverage at this time). And only 10% have never left the state they currently live in.... from this, and many other sources, it is clear that Americans are mobile. They go places. And the most successful cell-carriers are the ones that make sure Americans' phones just work no matter which state or city they go to.... as much of the time as possible.

    From http://livability.com/topics/business-and-economy/how-many-states-has-the-average-american-visited

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  12. Again the "majority" of Americans live in cities covered by all four networks. Far from a shut in I drive up and down California all the time. I've had AT&T, Sprint and T-Mobile and I never noticed a difference. Of course I know that Sprint and T-Mobile don't have the coverage that the big two have and if it doesn't work for you you shouldn't be on either of the smaller networks but just because it doesn't work for you doesn't mean it doesn't work for the "majority" of Americans.

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