Light Reading

Sprint, T-Mobile Settle on $32B Price

Alan Breznick

Sprint and T-Mobile have worked out the broad terms of a $32 billion merger that would potentially turn the combined company into a much more powerful competitor in the huge US wireless market.

The deal worked out by negotiators calls for Sprint Corp. (NYSE: S) to pay about $40 a share for T-Mobile US Inc. in a stock-and-cash arrangement, according to multiple news reports Thursday morning. That represents about a 17% premium over T-Mobile's closing stock on price on Wednesday. Neither of the companies were commenting on the reports this morning.

Even with the price apparently settled, though, the two companies must still hammer out a formal merger contract over the next few days or weeks. So the deal could still fall through if other terms can't be worked out.

If the deal is consummated, it would bring together the third- and fourth-biggest wireless carriers in the US, thus creating a much larger rival to the dominant duo of AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). SoftBank Corp. Chairman Masayoshi Son, whose company owns Sprint, has long argued that such a merger is necessary to create a national carrier with the resources to upgrade its network and compete against AT&T and Sprint. (See SoftBank Could Consider Euro Acquistions,)

But, by narrowing the wireless field in the US from four to three major carriers, the proposed deal would raise strong regulatory concerns in Washington, D.C. Both the Antitrust Division of the U.S. Department of Justice and the Federal Communications Commission (FCC) have already signaled that they favor four strong players in the market, not three, and regulators stepped in to block AT&T's proposed $39 billion bid for T-Mobile just three years ago.

Despite such concerns, the news reports say, both companies think their timing may be better now because of new developments at the FCC, including the latest stormy debate over net neutrality rules and new spectrum auction rules that appear to favor AT&T and Verizon over the smaller carriers. They are also hoping that the recent wave of proposed big US media mergers, including AT&T's $49 billion deal to buy DirecTV Group Inc. (NYSE: DTV) and Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s $45 billion agreement to purchase Time Warner Cable Inc. (NYSE: TWC), may have shifted the regulatory landscape.

Under the proposed deal, Deutsche Telekom AG (NYSE: DT), the majority owner of T-Mobile with a 67% stake, would continue to hold a 15% to 20% stake in the new combined company, according to the reports. That would free up the German carrier to concentrate on its European markets.

We'll have much more to say on this proposed merger as more details unfold. What had already promised to be a busy summer has just gotten even busier.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(8)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Light Sabre
6/6/2014 | 11:34:47 AM
Re: Competition
"Could AT&T have been agressive in their pricing in response to T-Mobile as a way to prevent Sprint buying T-Mobile long before it was even announced?  Where has Verizon and Sprint been in the price drops?"

I actually  think AT&T's reactions are mostly cosmetic, with the lion's share of price cuts being only modest cuts to 10 GB plans and higher. Sprint has responded somewhat with their "Framily" plans, but Verizon continues to believe they're network is SO GOOD they simply don't have to compete on price.
User Rank: Lightning
6/6/2014 | 11:31:08 AM
Re: Mobile in the Hills
As a long time T-Mobile customer I can tell you...good luck with that! T-Mobile's coverage is typically thought to be the worst of all four. In the cities and suburbs they are ok.

In rural areas they drop back to 2G in may places.
User Rank: Light Sabre
6/5/2014 | 10:54:01 PM
"Sprint said the deal would severely reduce competition in the United States cell phone industry."

So, if going from four to three would reduce competition in 2011, then going from four to three in 2014 will be no different.  I think the words from Sprint in 2011 should be used against them today.  Imagine the irony in that.


One hurdle, Sprint hates to open their network to BYOD in terms of the consumer whereas T-Mobile welcomes them with open arms.  Sprint is bad for the consumer; having them buy a pro-consumer company will not help competition but kill it.  Verizon is not too friendly with BYOD either.  AT&T at least tolerates it.


Could AT&T have been agressive in their pricing in response to T-Mobile as a way to prevent Sprint buying T-Mobile long before it was even announced?  Where has Verizon and Sprint been in the price drops?
sam masud
sam masud,
User Rank: Light Sabre
6/5/2014 | 3:19:55 PM
Re: Mobile in the Hills
I live within city limits but can't get a Tmobile signal if I am inside my home (it fine if I step outside)--a neighbor says she has the same problem with Verizon.
User Rank: Light Sabre
6/5/2014 | 12:40:49 PM
Mobile in the Hills
As a long time Virgin Mobile (which leases the Sprint network) customer, I hope this expands Sprint's coverage to beyond the Metro areas, like many other carriers.  The signals tend to drop or get lost in the far reaches of the suburbs and certainly in rural areas.

And I still wonder where Sprint is going with wireless broadband.  Is it only for mobile and short use (LTE data caps) or will they continue the Clear model of always on, unlimited data home use...

From The Founder
Steve Saunders provides an overview of white box networking and introduces a new "slim line" version of the OSI 7-layer model.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
Centec on Ethernet Switching

11|26|15   |   09:58   |   (0) comments

Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
LRTV Custom TV
Delivering Service Agility in the Virtualization Era

11|25|15   |   5.41   |   (0) comments

Interview with Massimo Fatato, WW OSS Business Lead, Hewlett Packard Enterprise.
Wagner’s Ring
How Might Open Source Fail?

11|24|15   |     |   (9) comments

Open source, SDN, and NFV are looking inevitable – but performance, standards proliferation and regulatory capture could derail the movement.
LRTV Custom TV
NFV Lifecycle Orchestration – a Fresh Vision for Telco

11|23|15   |   6.40   |   (0) comments

Simon Osborne, CTO Comptel, and Heavy Reading's Caroline Chappell reveal the business impacts of new SDN and NFV, and what the term service orchestration actually means. Together they define Lifecycle Service Orchestration and how the virtualized future will look for telecoms operators.
Between the CEOs
Cisco's Virtual Role in Saudi

11|20|15   |   12:15   |   (2) comments

Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
LRTV Huawei Video Resource Center
Huawei Leads With Kubernetes for Cloud PaaS

11|19|15   |   08:26   |   (0) comments

Huawei is looking to Kubernetes as a key tool for building robust open source technologies for customers and partners, said Ying Xiong, chief architect of cloud platform at Huawei, in an interview with Light Reading West Coast Bureau Chief Mitch Wagner at the recent Kubecon conference.
Women in Comms Introduction Videos
WiC in London: The Highlight Reel

11|19|15   |   5:33   |   (1) comment

NetCracker's Mervat El Dabae headlines an inspiring morning in London with help from leading women from Vodafone, TalkTalk, Hyperoptics and Ciena.
LRTV Documentaries
Why Saudi's So Hot for New Tech

11|19|15   |   05:07   |   (0) comments

Light Reading's Steve Saunders reports from Saudi Arabia, a hyper-competitive market desperate to embrace the next generation of communications technologies and services.
LRTV Custom TV
Why Data Models Deliver More Value Than Information Models

11|19|15   |   5.08   |   (0) comments

Stefan Vallin argues that more automation is needed to manage end-to-end services and the hybrid networks they run on, and that data models are key to achieving this.
Telecom Innovators Video Showcase
SDN Management & Orchestration in the WAN

11|17|15   |   7.20   |   (0) comments

Carol Wilson and Packet Design CTO Cengiz Alaettinoglu discuss CSPs' SDN service delivery and assurance requirements. Learn about a modular approach to building automated control, orchestration and management functions for the WAN that are policy- and analytics-driven.
LRTV Custom TV
Flash Networks: Optimizing for Radio Spectral Efficiency

11|17|15   |   3:34   |   (0) comments

Today most optimization vendors only focus on optimizing voice or data. Ofer Gottfried, Flash Networks' CTO, shows how improving data throughput and maximizing spectral efficiency reduces capital and operating expenses while also providing a platform for user engagement.
LRTV Custom TV
Making Pay-TV User Experiences Millennial-Friendly

11|16|15   |   6:42   |   (0) comments

The unique challenge of reaching and engaging Millennials is driving pay-TV video experience transformation that can include higher quality UIs, viewing of multiple content streams at once and seamless transitions between handheld devices and the television.
Allot MobileTrends Report H2/2015 reveals how daily online behavior can be used to discover smarter ways to profile customers and propose valuable, real-time offers to them.
Hot Topics
Samsung to Sell Wireless Networking Unit?
Dan Jones, Mobile Editor, 11/23/2015
Samsung: No Sale of Wireless Unit
Dan Jones, Mobile Editor, 11/25/2015
How Might Open Source Fail?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/24/2015
Sprint to Get $1.2B From New Leasing Venture
Dan Jones, Mobile Editor, 11/23/2015
Networking Shines in HP's Gloomy Final Earnings
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/25/2015
Like Us on Facebook
Twitter Feed
December 15, 2015
Virtualizing Cable Services
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
Cats with Phones
Can't Find the Phone on Thanksgiving? Click Here
Check under the cat! (hint: bottom right)
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and for copper plant evolution and the various deployment possibilities for FTTH/B.