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Sprint, T-Mobile Merger Falls Apart (Again!)

Sprint and T-Mobile have "noped" out of their potential merger. The companies announced Saturday afternoon that their talks didn't work out, so they're going their separate ways.

The companies issued a joint press release over the weekend describing the decision as mutual.

"We have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders," T-Mobile US Inc. CEO John Legere said in a prepared statement. The Sprint talks apparently failed to deliver that value.

The statement from Sprint Corp. (NYSE: S) CEO Marcelo Claure was characteristically more corporate-sounding: "We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth."

The break-up isn't surprising given recent reports that Sprint and Deutsche Telekom AG (NYSE: DT), T-Mobile's parent company, were squabbling over which side would get a controlling stake. One source told Light Reading the talks were getting "a little hostile and personal." (See Source: Egos 'Cloud' Sprint/T-Mobile Talks.)

Concerns over Sprint's financial structure have previously been alluded to by some T-Mobile execs as well. (See T-Mobile CFO on Sprint: Interesting, but We Have Options.)

While the press release puts on an optimistic face, both companies now have to grapple with ways to compete against the scale of AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ).

Combined, Sprint and T-Mobile would have formed an operator with around 130 million subscribers and the largest spectrum portfolio of any operator in the US, depending on US regulatory demands. Other options that have been mooted for both players in the past include a merger with a cable company or even tie-ups with a tech company like Google. (See Sprint & T-Mobile Aim to Keep as Much Spectrum as Possible in Merger – Report and Charter, Comcast Eye Sprint Tie-Up – Report.)

The deal has been an on-again, off-again saga for much of this year. Even though the companies had not said anything official -- until now -- executives had seemed confident that they would close the deal this time. (See T-Mobile, Sprint Restart Merger Talks – Report, Sprint Drops Bid for T-Mobile – Reports and Sprint Resumes Prelim Merger Talks With T-Mobile – Report.)

This isn't the first time the operators have tried to merge. A previous attempt fell apart in 2014. So whether this is the end of the story for the pair remains to be seen. (See Does T-Mobile Need Sprint to Scale? and Rumors of a Sprint/T-Mobile Merger Again.)

Sprint and T-Mobile's shares dropped around 9% and 5%, respectively, early last week as reports emerged of the talks falling apart.

— Craig Matsumoto, Editor-in-Chief, and Dan Jones, Mobile Editor, Light Reading

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