Sun, Dec 15, 2013 - Page 13 News List

Sprint deliberates market-changing bid for T-Mobile

MEGA MERGER:The deal to unite the US’ No. 3 and No. 4 mobile carriers would see Sprint consolidate its third-place spot, but would hinge on the approval of regulators


Sprint Corp, the US’ No. 3 mobile carrier, is considering a bid for rival T-Mobile International AG, a move that could shake up the wireless market, the Wall Street Journal reported on Friday.

The report, citing sources familiar with the matter, said the deal could be worth more than US$20 billion, but added that the plan could be scuttled if it faces opposition from regulators.

Sprint in July closed a deal that allowed Japan’s SoftBank Corp to take a controlling stake for US$21.6 billion, after a bidding war with Dish Network and special concessions made to alleviate US national security concerns about a foreign-owned telecom.

A merger of Sprint and T-Mobile — the fourth-largest carrier in the US — would create a stronger No. 3 player in the wireless sector, but would still be smaller than market leaders AT&T Inc and Verizon Communications Inc, the paper said.

A Sprint spokesman said in an e-mail that the company “doesn’t comment on rumors and speculation.”

T-Mobile, which is controlled by Germany’s Deutsche Telekom AG, this year completed an acquisition of smaller carrier MetroPCS.

According to the Journal, Sprint has not decided on moving ahead with a bid. The report said the firm may test US antitrust officials’ reaction to a deal and that a bad reaction could put an end to the effort.

AT&T sought to buy T-Mobile for US$39 billion in 2011, but backed down amid opposition from US regulators.

Telecom analyst Jeff Kagan said it remains unclear how US authorities will respond to such a deal.

“I think Softbank and Sprint would love to sink their teeth into T-Mobile,” he said. “It would transform them into a much larger and much stronger third-place competitor, especially since they are both reinventing themselves as we speak.”

“The real question is: Would the US government permit it? When they said no to the AT&T merger, they said it was to keep the top four wireless carriers separate for competitive reasons. If that is still the case, then there is no chance of this merger happening,” Kagan added.

The SoftBank deal was cleared by US security officials in May under the condition of appointing an independent member to Sprint’s board of directors as security director.

The director, who must be approved by US authorities, oversees national security matters and is a point of contact for US agencies.

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