Sprint and T-Mobile Merger: Bid in June or July Possible
Despite resistance from the U.S. government, Sprint could finally make an offer for U.S. wireless carrier T-Mobile within a couple months, according to a new Bloomberg report.
Sprint has been meeting with banks to solidify the proper funds for a proposal expected in June or July, according to unnamed sources in the Bloomberg report . The dates are some of the first indications that Sprint is ready to make a concrete offer for T-Mobile. Hints of the deal first began trickling out late last year.
Although Sprint parent company SoftBank Corp. and T-Mobile parent company Deutsche Telekom AG are still discussing who would run the final Sprint/T-Mobile company, current maverick T-Mobile CEO John Legere is apparently a "leading candidate" at this point. Legere has reignited the T-Mobile brand in recent years with aggressive pricing moves and finger pointing.
SoftBank chief executive and Sprint chairman Masayoshi Son has made no attempts to hide his desire to take over T-Mobile. Son has repeatedly expressed the necessity for Sprint and T-Mobile to combine forces in order to better compete against the juggernauts of AT&T and Verizon.
"I brought the network war and price war (to Japan). I'd like to bring that to the States," Son said at the U.S. Chamber of Commerce to industry officials in March. "I would like to provide an alternative to the oligopolistic situation that two-thirds of American households can only get access to one or two providers. I'd like to be a third alternative with 10 times the speed and lower price."
"If the government wants us to have a competitive environment, you are going to make sure that the duopoly doesn't use their prowess to crush the little guys and have this sub-1 GHz spectrum be moved all to them," said T-Mobile CEO John Legere in an interview on television show Bloomberg West earlier this year.
"We're all going to need better scale and capability. The question starts to be: How do you take the maverick and supercharge it? We either need more spectrum and capability, a lot more investment, or we need consolidation."
A Sprint takeover would have major implications for the U.S. wireless industry. Not only would it decrease the number of national mobile providers from four to three, it would also disrupt initial plans for the 2015 FCC spectrum auction -- an auction with such valuable bandwidth at stake that it could shape the U.S. wireless landscape for years after.
Both the U.S. Department of Justice's antitrust department and the FCC have expressed concern about market consolidation, fearing that consumers would face higher prices. Approval from both institutions is needed for the deal to go through. Some analysts, however, have found that market prices dropped in countries where the number of major carriers dropped from four to three.