T-Mobile and Sprint, two of the largest carriers in the U.S., are talking about a merger yet again. A report published by CNBC reveals their parent companies are engaged in conversations for a stock-for-stock deal. The merger, if completed based on the terms reported, wouldn’t give birth to an entirely new company. It turns out that one parent company, according to Bloomberg, will continue owning the two-headed carrier.
A deal between Deutsche Telekom and SoftBank would transfer ownership of both T-Mobile and Sprint to the German telecommunications company. SoftBank would become a minority owner, meaning Deutsche Telekom calls the shots. Also, T-Mobile’s John Legere would reportedly stay in charge of the merged carrier and likely dismantle Sprint. Maintaining control of the two carriers is a priority for Deutsche Telekom as T-Mobile currently has a large impact on its revenue.
Deutsche Telekom and SoftBank have been exploring a merger for their brands since December 2013. That’s when SoftBank became interested in taking over T-Mobile due to Team Magenta’s disruption in the wireless industry. However, regulators expressed concern and the deal fell apart. The U.S. government wished to maintain four national carriers to give consumers choice for wireless service.
Countless times after, the two companies tried again but never agreed on anything. Iliad, a Paris-based telecommunications company, announced a bid for T-Mobile in 2014 but never formally submitted anything. Since then, there have been endless rumblings of the two carriers joining together.
It’s believed that a merger between T-Mobile and Sprint would face little pushback from the current FTC. Should it clear the regulatory hurdles as quickly as some suspect, it could mean T-Mobile and Sprint will become one in early 2018.
If Sprint gets folded, it’ll be because T-Mobile’s network is far superior. The Un-carrier has invested billions of dollars in infrastructure and additional spectrum to build a network for the future. Sprint’s network, on the other hand, is dated and constantly panned. As of May 2017, Sprint has 52 million subscribers while T-Mobile has 70 million subscribers.