May 12th, 2017

Here we are again, boys and girls. A new report from Bloomberg states that there are currently some “informal negotiations” taking place between Softbank, the parent company of Sprint and Deutsche Telekom, the parent company of T-Mobile. Over the last few years, there have been various rumors and reports stating that the two carriers were attempting a merger, only for talks to disperse or evaporate altogether. 

Back in February, the rumors started to pop up again, but the two companies were not able to negotiate due to FCC-imposed anti-collusion rules. These rules were put in place due to an on-going government spectrum auction which just ended on April 27th.

These talks are still in the very early stages, as Bloomberg reports that neither side has a hired a bank to broker the potential deal. However, this round of negotiations may go in a very different direction than Softbank had initially intended.

Back when these rumors first started a few years ago, Sprint was looking to acquire the struggling T-Mobile. However, thanks to John Legere and the new Uncarrier movement, T-Mobile has surpassed Sprint with a recent valuation of $55 billion, which is $23 billion more than Sprint. This would put Deutsche Telekom in the driver’s seat, as we would likely see Sprint absorbed, instead of the opposite way. 

Not everything is clear cut though, as there have been various companies, including Comcast, which are looking to get into the wireless market. A partnership with T-Mobile would definitely put the Sprint merger on the back-burners again, if not kill them altogether.

Now that the government spectrum auction has concluded, it will be interesting to see if T-Mobile and Sprint can make something happen. But the real fun will come when it comes time for the government’s approval, which has already been a struggle for the two carriers.

[Bloomberg]

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