Sprint has a new champion leading its Kansas-based wireless service, and he is 6-foot-6 from south of the border. The No. 3 wireless carrier in the United States not only dropped its bid for T-Mobile earlier this week, it replaced its CEO with a Bolivian billionaire.
Sprint and T-Mobile received another blow late last week as the Federal Communications Commission (FCC) made it clear that it would not be supportive of joint bids during next year's spectrum auction.
As merger talks heat up the telecomm industry, one in particular has faced more regulatory scrutiny than others: Sprint acquiring T-Mobile. In hopes of putting together a foolproof argument before officially coming before lawmakers, the companies involved will not be making their pitches before September, according to new reports.
A merger between wireless carriers Sprint and T-Mobile seems to be picking up steam, as Sprint parent company SoftBank Corp. has reportedly reached a skeletal agreement with T-Mobile parent Deutsche Telekom AG for the acquisition.
According to a new Reuters report, eight banks, including international banks JPMorgan Chase & Co, Goldman Sachs Group, Deutsche Bank AG, Bank of America Merrill Lynch and Citigroup Inc, have agreed to help finance the acquisition of T-Mobile. All in all we're looking at a $40 billion deal, $8 billion more than previously thought.
Deutsche Telekom AG, the parent company of T-Mobile, is demanding a $1 billion breakup fee if Sprint parent company SoftBank isn't able to convince U.S. regulators that Sprint should be allowed to buy out T-Mobile.
SoftBank Corp. chief executive and Sprint chairman Masayoshi Son has been on the offensive recently, having taken his case for a merger with T-Mobile directly to the Chamber of Commerce earlier this week. One of his arguments, that Sprint's spectrum assets lend itself to a merger, however, may not be so convincing.
Sprint's support for acquiring fellow wireless service provider T-Mobile may be dwindling faster than it had hoped. Arguments that the two carriers can better compete with juggernauts Verizon and AT&T may lose steam as Deutsche Telekom AG, the owner of T-Mobile, is confident that T-Mobile can stand on its own.
