& cplSiteName &

Sprint, T-Mobile Settle on $32B Price

Alan Breznick
6/5/2014
50%
50%

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
KBode
50%
50%
KBode,
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.
mjgraves
50%
50%
mjgraves,
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.
lanbrown
50%
50%
lanbrown,
User Rank: Light Sabre
6/5/2014 | 10:54:01 PM
Competition
"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
50%
50%
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.
jabailo
0%
100%
jabailo,
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
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
YouTube Takes on Facebook Live-Streaming

2|17|17   |     |   (0) comments


Popular 'YouTubers' will be the first to get the new service on their smartphones. You have been warned.
LRTV Custom TV
Open Source NFV/SDN Automation

2|17|17   |   05:54   |   (0) comments


AT&T ECOMP (Enhanced Control, Orchestration, Management and Policy) code is transitioning into the Linux Foundation for placement into open source. In this video, Carol Wilson provides an update on the maturation of open source ECOMP and meets with industry leaders from AT&T, Bell Canada, Orange, Linux Foundation and Amdocs to discuss what this means for the ...
LRTV Documentaries
Uber & NASA Collaborate on Flying Car Project

2|16|17   |     |   (0) comments


Is Uber for real? Well, it's hired NASA engineer Mark Moore to lead the project, and he wouldn't come cheap.
LRTV Documentaries
Zuckerberg Tries Out the Oculus Rift VR Glove

2|15|17   |     |   (0) comments


Facebook CEO shows off a new way to interact with the Oculus Rift virtual reality headset: an Oculus glove.
LRTV Custom TV
Huawei Digital Transformation Forum 2017

2|10|17   |     |   (0) comments


Here's a preview of the upcoming Huawei Digital Transformation Forum taking place in Barcelona with trending telecom topics like cloud, IoT, 5G and much more!
Telecom Innovators Video Showcase
Dan Sahar of Qwilt on Open Edge Cloud Platform

2|8|17   |   08:38   |   (0) comments


Dan Sahar, Qwilt's co-founder, sits down with Steve Saunders of Light Reading for a conversation about Qwilt's Open Edge Cloud platform and the new role of service providers in application and content delivery.
LRTV Documentaries
ZeroStack's 'Self-Driving Cloud'

2|7|17   |   01:09   |   (0) comments


Its Z-Brain tech automates day-to-day management and long-term planning for hybrid clouds.
Telecom Innovators Video Showcase
Nominum's Craig Sprosts on DNS & Cybersecurity Trends

2|7|17   |     |   (0) comments


Nominum's Craig Sprosts talks about the fast-changing landscape of cybersecurity with Steve Saunders of Light Reading. Sprosts touches on the trend of the rise of ransomwares, rivals of IoT base attacks, and mobile network security. He also discusses the realization of the importance of IoT security after a recent cyber attack that paralyzed several major ...
LRTV Documentaries
China Moves Towards Mixed Ownership of Telcos

2|1|17   |   01:10   |   (0) comments


Chinese authorities are promoting new ownership models in order to raise capital.
Shades of Ray
What to Expect at MWC 2017

1|31|17   |     |   (0) comments


5G is set to dominate as the key buzz term at this year's Mobile World Congress but there are other pressing 4G matters to address.
Telecom Innovators Video Showcase
Versa: A Lot More Than SD-WAN

1|31|17   |     |   (0) comments


Kelly Ahuja, the new CEO of Versa Networks, speaks with Steve Saunders of Light Reading about how Versa offers much more than just SD-WAN, and its plan to grow market adoption in 2017.
LRTV Documentaries
Facebook Gets Physical With Its Security Strategy

1|31|17   |   00:48   |   (0) comments


Facebook has introduced new measures that will enable users to secure access to their accounts using a physical 'key' application.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
T-Mobile CEO: M&A Coming but Not Quite Yet
Dan Jones, Mobile Editor, 2/14/2017
Is the Time Right for a Cisco/Ericsson Wedding?
Ray Le Maistre, Editor-in-chief, 2/17/2017
Nice to See at Least One CSP Taking My Advice
Mitch Wagner, Editor, Enterprise Cloud, 2/17/2017
Time to Invest in Virtual Reality?
P. Tracy Currie, CEO and Co-Founder, Capto Consulting, 2/13/2017
Charter Launches 5G Field Trials
Mari Silbey, Senior Editor, Cable/Video, 2/16/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.