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T-Mobile and Sprint Call Off Merger

No Sprint/T-Mobile Deal
What seemed like a done deal a week ago has turned into no deal at all. Number three and four US carriers T-Mobile USA and Sprint issued a joint statement today have ended merger discussions after they were unable to agree on mutually agreeable terms.

Reading between the lines of the companies' statement, the key sticking points seem to have been money and control.  Although the proposed merger was reportedly an all-stock deal, Sprint management appears to feel that T-Mobile wasn't offering its shareholders enough shares of the combined company. Sprint's statement hints that the deal undervalued its assets, especially its huge reserves of, mostly undeveloped, high band spectrum. T-Mobile's suggests that Sprint's proposed terms didn't offer enough value to T-Mobile's shareholders, i.e., the price was too high. 

The New York Times reports that the ultimate deal breaker was over control. The CEOs of T-Mobile and Sprint's parent companies, Tim Höttges of Deutsche Telekom and Softbank's Masayoshi Son met earlier today at Son's Tokyo home. Höttges delivered T-Mobile's final offer, which likely included more equity for Softbank. Son reportedly rejected the offer because it did not give Sprint and Softbank management enough control over the combined company

So for now at least, Sprint and T-Mobile remain independent. Both companies pledged to move forward with investments in their networks. Sprint's also expressed a desire "to establish strong partnerships across multiple industries", which I take to mean that it's still interested in a merger or acquisition.  I think Son is going to have trouble finding someone willing to meet his terms.


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41 comments:

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  1. A win for consumers! Hip hip hooray!

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    1. Being able to choose between four wireless carriers is very important in my rural area which has no wired access. I am very glad this merger has failed.

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  2. Charter, Comcast and Dish have already rejected a deal with Sprint once. Son is trying again with Charter. They and Comcast have cash to pay loans and invest in the wireless network.

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  3. Thrn it is status-quo: Sprint languishing, at best flipping like a fish on a deck, and T-Mobile continuing its slow but strong striving to become the third duopoly member.

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  4. I would appreciate some advice. I'm trying to decide between Metropcs 4 unlimited lines for $100 versus Boost's 5 unlimited lines for $100.

    Obviously the hot-spot and extra line have value. I'm a Boost customer now and frequently find no or slow data when I am out and about.

    Our phones don't have HPUE. I understand Sprint is receiving a roaming agreement with T-Mobile as severance. Will Boost receive this added coverage? If so will Boost receive the 600MHz coverage? If so, how likely is Boost to offer phones that support roaming on T-Mobile?

    Basically, I'm trying to determine how likely Boost coverage is to improve by virtue of T-Mobile roaming or an HPUE equipped phone.

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    1. No roaming agreement. The deal was never signed.

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    2. Well, if you live in a big metro area, T-Mobile has a much better network than Sprint and on par with AT&T and Verizon. If you in the boonies I would pick Verizon. So no for Sprint pretty much everywhere.

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    3. Start by checking coverage maps, where you go. That’s what Dennis always says. Then pick carrier plan.

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    4. Im on boost as well and the zte max has HPUE, Also any iphone 7 or newer or galaxy s7 or newer have HPUE. I am using an unlocked iphone 7 and get LTE Plus and routinely see download speeds of 150 mb. In denver metro area

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    5. Approx 1000 feet away from my home I can pick up band 41 and up to 100 MBPS, so I upgraded to the ZTE Max XL with HPUE in hopes of being able to be on band 41 at my house, guess what no luck im stuck on band 25 and 26, so this should tell folks the that HPUE is no miracle fix for Sprint

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  5. I'm glad the merger didn't go through.

    Sprint has become a strong, flourishing company under Softbank's management, and they should've been given complete control over the merged entity.

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    1. why? TMUS is worth twice as much and has added >1M new customers every quarter 18 in a row. Leading industry growth for 14 quarters in a row. Much better network. Not mired in debt, starving capex, selling its towers, phone business and hocking spectrum to make loan payments.

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  6. Sprint shares realistically are worth about $2 a share, so at Friday's close of $6.67 its about 350% overvalued. They should have taken T-Mobile's offer, no one in his right mind will offer them no were near that, unless they are ready to invest another $100 billion in their network.Look for the stock to take a big nose dive on Monday.

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    1. Because you totally know how much worth stock is right?

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    2. It opened $0.81 down this morning, and traded down another $0.15 from there. Someone is buying though -- guess we'll have to wait and see.

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  7. Lol Sprint is by far the least valuable carrier and they think T-Mobile should pay a higher price? And after running Sprint into the ground Son wants to control T-Mobile? Son wants to run two wireless carriers into the ground to prove how incompetent he is? Obviously, Sprint needs a new parent company.

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    1. Yes, no, no to your lol questions.

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  8. Simple. Sprint wanted to wreck T-Mobile. T-Mobile ain’t havin’ it.

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  9. Sprint's spectrum alone is worth more than their share price.

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    1. The spectrum value is a big part of their share price. It's only worth more if someone was willing to pay a premium for it. Instead, Sprint is borrowing against it.

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  10. Sprint would turn Tmobile into a big steaming pile...the stench it has would spread to Tmobile and ruin a better , bigger network... Anyone with any brains would know that it's always been Sprint management that has caused Sprint to be a garbage carrier for the last 12 years since they screwed up the Nextel murder..uh merger... lol

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    1. Those Sprint execs were "retired." Keep up.

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  11. A real non-story. The two worst "carriers" in the country looking to become a larger "worst" carrier. Neither operator has the coverage or the network to compete with Blue or Red and so they're both non existent to me. Don't really care either way. I'd take two large tin cans and a long string before relying on "service" from either "carrier" for my needs.

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  12. Fantastic news. T-Mobile and Sprint are slowly chipping away at the Big 2. It's a tortoise and hare situtation. Metropcs and Boost are giving us real competition, while competitors are throttling service and raising prices. Slow and steady wins the race.

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    1. Maybe. The yellow turtle may run out of assets to mortgage and expire before the finish line.

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  13. T-Mobile is better off building out their new 600Mhz network rather than merging with an incompatible cellular system.

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    1. T-Mobile planned to do both. Now they'll have to deploy 600 MHz on their own. Billions of dollars will have to be borrowed, and new customers found to help pay back loans. Growth slowed in Q3 so what will they do?

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  14. SoftBank is on buying spree but without any technical or management chops. These M&As are as scandalous as the current sex scandals...as long as they are not made public. There should be a regulation that a merger when goes through or not, the agreements should be made public.

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    1. Do your homework. SoftBank has extensive technical and management skills and an excellent track record in wireless. They have unique challenges turning Sprint around and have made progress, but not as fast as they wanted. We'll see what Plan B looks like. More money for CAPEX has to be found from a partner or borrowed via SoftBank.

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    2. "SoftBank has extensive technical and management skills and an excellent track record in wireless"

      Did you get this from ad copy? Your statement sure bears no resemblance to SoftBank/Sprint operations in the US.

      Or are you just bring sarcastic ?

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  15. Please. Please. Just let Sprint DIE already. Then everyone else can come and pick the carcass clean. I am so sick of Sprint not being allowed to die a natural selection death.

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    1. I agree, but Sprint's death should only be allowed if there is a "New Sprint" or a "Softbank USA" formed to pick up most of old Sprint's most valuable parts. That way a new lower debt, unprofitable contract unburdened, aggressive LTE only fourth carrier could emerge to take old Sprint's place. Connectivity in the US is vulnerable and would be devastated unless four nationwide wireless carriers are preserved.

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    2. "I agree, but Sprint's death should only be allowed..."

      I strongly reject the corporate welfare situation of the government intervening to bail out companies that run themselves into the ground. It's always a mistake, and it encourages companies to behave irresponsibly.

      Yet there is always Chicken Little-like "sky is falling" hysteria by those who favor massive taxpayer handouts to wealthy corporations to insulate such corporations from the consequences of their folly. This happened to defend the terrible idea of TARP and wasting billions in a gift to the auto industry, and the "devastated" statement here is an example of fear mongering in regards to telecommunications.

      As with any business, there should be $0 taxpayer handouts, and standard existing bankruptcy laws are more than sufficient to handle these situations.

      As to whether or not something is "allowed", it is simply not the government's business at all. If a "New Sprint" arises from the actions of the private sector, and the private sector alone, then fine.

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    3. I was talking about Softbank continuing to support Sprint until "New Sprint" is ready to go, not the government. I do not want government funds involved any more than you do. The government's role is to make sure that Sprint is not just turned upside down. I think this transition needs to happen within the next two years so that they do not continue to languish. Given the state of our infrastructure, we should to be "fearful" of not having four carriers.

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  16. This is great that the merger talks are over. Sprint needs to develop its unused spectrum but will need to find the funding to do so. T-Mo can start to roll out it 600mhz. A merger would have caused a lot of problems for both sides.

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  17. why is everyone so anti sprint/boost? if you don't like them simple just don't use them! right?

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    1. I avoid Sprint like the plague. I was rooting against the merger because that plague is highly contagious.

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    2. Because it's high time for this dead hoarse to get out of the race.

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  18. Altice USA, Sprint agree to wireless partnership - http://www.reuters.com/article/us-sprint-altice-usa/altice-usa-sprint-agree-to-wireless-partnership-idUSKBN1D513H

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