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Report: T-Mobile and Sprint Continue Merger Talks

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Back in November, there were reports that T-Mobile and Sprint called off its merger talks. After a series of rumors about the number three and four US carriers merging together, the two companies released a statement that they have ended such discussions after failing to agree on mutually agreeable terms.

However, it looks like this might not be a final report. As it turns out, the two companies are still continuing negotiating its plans to merge together.

According to sources cited by the respectable publication, the Wall Street Journal, T-Mobile and Sprint have once again started their merger talks.

As far as details go, however, details are scarce right now since the two are still in preliminary talks. It's still possible that they won't come to an agreement in the end.

This possible merger continues on earlier negotiation reports about the two companies. Last year, there were reports that executives from Sprint and SoftBank (the largest shareholder of Sprint) were talking about a possbile deal with T-Mobile's parent company, Deustche Telekom. Confirming this report, CEOs from both companies have spoken to investors about a merger just this week.

This is the third time T-Mobile and Sprint have been reportedly shown interest in merging. The closest both companies came through a deal was late last year. Unfortunately, the talks stopped after both were unable to come to a mutually favorable term with each other.

The current standing of both companies aren't too different from the last reports. Even though T-Mobile has ranked third among the big major carriers and they have more subscribers compared to Sprint, it's likely they are interested in the spectrum of Sprint.

Right now, all we can do is wait for the outcome of this third merger talks. But even if they come to an agreement, it will still take some time since the deal would have to be reviewed.

As they say, third time's the charm. Could it hold true for Sprint and T-Mobile too?



Source: Tmo News

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31 comments:

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  1. This is Bad News For Consumers; Four competitors is always better than three competitors. Prices will to go up if T-mobile and Sprint merge.

    Hopefully this will not happen.

    It would be better for the consumer if Charter and/or Comcast acquired Sprint;keeping the spectrum spread among four cellular players.

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    1. Since Sprint is already has a relationship with Altice, I think it should be the cable company that merges with Sprint. A T-Mobile/Sprint merger must be blocked.

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  2. Less competitors means higher prices for consumers so hopefully this will not work out

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  3. I don't understand why people keep insinuating that if Sprint and T-Mobile merge that it's the end of the world for consumers and that there isn't a fifth carrier (U.S. Cellular) that wouldn't automatically take forth place after the merger. Honestly I hope they do merge Sprint is dying there's really nothing they can do now since the "brand" has been tainted and now is a joke to everyone including companies. I would rather see my old carrier from my teen years (Sprint) go out gracefully and their spectrum, subscribers, and other resources be put to good use on the T-Mobile network than to see Sprint lose everything, be picked apart, see companies be vultures bidding on anything they can get afterwards as if Sprint wasn't nothing to begin with. Love them or hate them Sprint has done so much for us and other companies since the day they've lunched that they deserve better than the latter scenario. As U.S. Cellular is the fifth carrier it's now their job "if" the merger happens to step up, bring something new to the table and give us a reason to start joining their service especially those who don't want to be with Verizon, AT&T, or T-Mobile/(whatever name they use after the merger).

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    1. US Cellular is a regional operator with service in mostly rural areas in 23 states. Their prices are high reflecting the cost of providing service in areas with low population density. There's no way that US Cellular can provide the sort of downward price pressure that Sprint does.

      U.S. Cellular has 5 million customers, 1/25th as many as the 127 million a combined T-Mobile and Sprint would have. They do not have the spectrum or financial resources to expand to the point where they would have any affect on the prices of the four (or three) largest carriers.

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    2. Dennis,

      I am the Anon who wrote this comment. I don't know too much about U.S. Cellular all I know is, it's the fifth largest carrier in the U.S. so the extra information you provided to me about them was helpful. I just want to piggy back off some of the information you gave me, you said at this moment their (prices are high) because of the service they provide in (rural areas). Those two statements right there are already wins to me and some people, being that they provide service for rural areas is amazing when you have some carriers in the top 4 who can't or won't provide that. You never stated how good their coverage was in these areas so I'm guessing or hoping it's pretty good since the prices are high and their business model is providing service in those areas. You also talked about spectrum, total number of subscribers, and financial resources all three of those statements are the same things Verizon, AT&T, T-Mobile, and Sprint had to deal with when they first started out if not all than "some".

      Let's just say T-Mobile and Sprint were to merge it will automatically place U.S. Cellular in the forth position as the forth largest U.S. carrier, do you know how big that is and how important that position is? Every time news break about the merger between Sprint and T-Mobile is back on again, you'll always see people saying "no we need 4 carriers not 3" and we're not just talking about consumers stating this we have people in all different fields and walks of life CEOs, analyst, investors, and etc. commentating on this. These people are so afraid that if the merger happens that prices will go up and being that fear sometimes drives people to do certain things I would doubt or count out U.S. Cellular yet.

      All those people I listed consumers, CEOs, analyst, investors, and etc. etc. are going to be those very people who will flock to U.S. Cellular as soon as the merger has been approved by the main key people in charge of regulating things. The fear of what will happen after the merger will drive investors (the financial resources), will drive CEOs of companies (who have the spectrum U.S. Cellular needs to compete), that fear alone will having them flocking to the new forth largest U.S. carrier before the ink dries. When it's all said and done the rest will follow, prices at USC will normalize, the spectrum it gained from partnering with those CEOs will help that, the financial resources it gained from investors will also help to improve their current towers and build new ones, and last but not least consumers will flock.

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    3. US Cellular management seems very conservative and content to make a modest profit serving their current markets. They actually downsized a couple of years ago by selling their Chicago area spectrum and towers to Sprint. I can't imagine US Cellular management betting the company by acquiring the massive amount of debt that it would take build a nationwide network.

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    4. "Let's just say T-Mobile and Sprint were to merge it will automatically place U.S. Cellular in the forth position as the forth largest U.S. carrier, do you know how big that is and how important that position is?"

      It's an empty title, given the vast gap there is between them and Sprint (the current #4.) They're #5 because they are the largest amongst the small.

      USCC management has long resisted buyout offers. But they have recently established an LTE roaming agreement with T-Mobile; assuming it's reciprocal, that gives USCC even less incentive to build out and compete on a truly national stage like the top four do.

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    5. It's me again lol,

      Interesting well that's a shame because if they didn't have that mindset they could've been bigger than what they are currently "if" the merger happens but I do understand as a business owner myself. Getting into unnecessary debt is never good and I wouldn't do it either. I guess for me I just don't want to see Sprint go down like that being that they played a huge part in some of us childhood and teen years and I would've liked to see a better outcome for them in this merger were everybody could benefit and be happy and for people not to worry in hopes that USC would step up willingly if it's positioned in the forth place.

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    6. US Cellular's roaming agreement with T-Mobile only covers California, Iowa, Washington, and Wisconsin.

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  4. Nobody has any control over this. It is up to the Federal Govt, the DOJ and the FCC. Att is having a hard time right now with its merger but this administration has no concept of the term 'consistency" so who knows which way it goes. It's strictly 50/50 at this point. Considering FCC head dumbass and former Verizon exec drone Ajit Pai killed Net neutrality, it can go either way. Looking for stability? Get a new president. LMAO.

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  5. SPRINT = TOUCH OF DEATH
    NO. NO. NO. For the love of God. NO.

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    1. Exactly, why T-Mobile would want to merge with this instead of being patient and picking at its carcass makes no sense too me.

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  6. A third, strong competitor is better than two much weaker ones. I hope the merger goes through this time.

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    1. Third strong competitor? We have that now. Bond yields are on the rise and Sprint has too much debt. Merging that situation with T-Mobile's debt could bring both companies down. Then we will have only two strong competitors which would be a terrible situation for the American consumer. Sprint needs to run its course.

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    2. Do your homework on 5G, folks. Only Sprint owns enough spectrum bandwidth to create a fast, mobile 5G network around the country.

      T-Mobile does not own enough spectrum. It only owns an average of 31 MHz of 600 MHz low band in each market and it needs 100 MHz for fast mobile 5G. They don't own enough mid-band to make up the difference. T-Mobile would have to buy a LOT more spectrum (they want the 3.5 GHz band) or partner with another carrier to share a 5G network. It would be cheaper and easier to just buy Sprint.

      Sprint has ~160 MHz of 2.5 GHz in the top 100 US markets. If FCC frees up more spectrum on the 2.5 edu band and regional carriers pool their 2.5 spectrum and team with Sprint in smaller markets and rural areas, Sprint is done. With massive MIMO and HPUE their 2.5GHz spectrum propagates like their 1.9 MHz, and they plan to add thousands of small cells, at least 15,000. Sprint will use 128 antennas per box (vs 8 now) for very precise 5G beam forming and huge capacity. They partnered with Qualcomm ~a year ago to get the hardware right.

      Neither Verizon nor AT&T have enough spectrum to field fast mobile 5G. They are experimenting with fixed 5G and AT&T plans to turn on only a few cities where they can cobble the spectrum for mobile 5G until they come up with a plan. All the carriers are pushing the FCC for more mid-band spectrum, the 2.1-6 MHz range where 5G will live in the US. They each have a different strategy; at least two carriers will fight over a DISH partnership this year. This situation should change. It's just too expensive for 4 carriers to build a fast, mobile 5G network across the whole country. The spectrum would cost too much, even using lots of unlicensed spectrum where available.

      Sprint is a bargain right now. It's 2.5 GHz spectrum has been steadily increasing in value, and that is not reflected in the Sprint stock price.

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  7. Neither carrier has coverage within 30-70 miles of my house, so not much of a big deal to me.

    In addition to US Cellular, there are smaller carriers as well. The small carrier in my area offers better plans than Verizon or US Cellular, and has better coverage than Tmobile, Sprint, ATT in my area/state.

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  8. If T-mobile can buy Sprint for around $1 a share it's a good deal for them, anything over that is a waste of money. Sprint has a huge debt on their books, and their spectrum holdings is in the 2.5GHZ which is much less desirable.

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    1. Sprint is worth no more than $4 billion today.Unless Legere is drunk.

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    2. 2.5 GHz is just right for 5G and handles far more capacity than low band.

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    3. @Anon422, 2.5 GHz's propagation is crap though, so unless T-Mobile can set up CA with a low-band network, it would be about as useful as it has been to Sprint.

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    4. Hint: It's all about the antennas. Do your research.

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    5. All China carriers, the EU, Canada and SoftBank will rely on 2.5 GHz for 5G networks. 2.5 is one of the 4 sub-standards for 5G under the 3GPP Global standards release: the First 5G Non-Standalone New Radio Standard that arrived just before Christmas.

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  9. Esteemed corporate samurai Masayoshi Son has to convince the investors to sell at an unfavorable loss while covering up the fact that he was an imbecile to buy Sprint in the first place.

    He's walking a tight rope, and he'll probably wind up covering his ass at the expense of Softbank itself.

    After all, the only way to get the point across and save the company from its self-inflicted financial burden ASAP is by making it clear to investors that Sprint's a toxic asset.

    However, doing so would shatter their confidence in Son's ability to navigate global markets and potentially damage his livelihood.

    It's easier for him to just wing it for now and then glide away on a golden parachute, Softbank be damned.

    Tmo will buy Sprint for bargain bin prices sooner or later, and the only question is how long Son can keep up the appearance that Sprint has any sort of positive net worth outside of a buyout.

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    1. Whatever you're smoking, stop before it's too late!

      Masatoshi Son owns 231,205 shares, or 21 % of SoftBank. It's biggest stakeholder. If he shafts SoftBank, he screws himself.

      Sprint is not a toxic asset. The spectrum value is Sprint's valuation. Huge amounts, far more than any other carrier. And 2500 MHz is perfect for 5G.

      Son and Claure exceeded their $2.5M cost reduction target, turned around subscriber losses and Sprint is making profits again, however small. Their network speeds and reliability are much improved since SoftBank took over. SoftBank's additional investment in Sprint just gave them the rest of the money they needed to put CAPEX back where it belongs and deploy the tech needed for extra capacity and 5G transition.

      T-Mobile will pay a lot more for Sprint than you think. They need the scale, spectrum and billions in combined cost synergies to be a strong competitor to Vzw and AT&T (even Legere agrees). The only big open issue is control of the combined company, control of the BOD.

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    2. Typo: Should have said $2.5B/year Sprint cost reduction target was exceeded.

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    3. The problem is that Sprint needs Tmo, while Tmo doesn't need Sprint.

      Tmo has all the leverage and can just wait out their inevitable demise.

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    4. Tmo needs Sprint's spectrum for field fast, mobile 5G with enough capacity across the country. If Tmo doesn't buy Sprint they have to get in a bidding war with AT&T and Verizon for Dish, or hope that FCC frees up enough mid-band spectrum for them to buy and successfully roll out for a new 5G mobile network.

      Sprint does NOT need Tmo to field a fast mobile 5G network with LOTS of capacity across the US as long as they can earn or borrow enough money to refinance their loans when they come due. Sprint already has enough spectrum to field all the speed and capacity they need in the top 100 markets, and can partner with other 2.5 GHz regional carriers for expanded coverage. They are lobbying the FCC to expand geographic coverage for the edu side of the 2.5GHz band too.

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    5. Sprint and T-Mobile need each other to increase scale. This helps them get the best prices on network gear, handsets and tower leases. Right now both are too small to get the best deals. They can also eliminate redundant $billions in operations and management costs.

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    6. The smart way to deploy 5G - US carriers should do what Korean ones are planning:
      https://www.fiercewireless.com/wireless/south-korean-operators-to-share-5g-network-infrastructure-costs

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