Sprint and T-Mobile Are Talking About a Potential Merger Again

Photo: Axel Schwenke/Flickr CC

Since the year 2014, there have been consistent rumors and reports that T-Mobile and Sprint will merge, but the two companies have yet to actually go through with it.

Last year seemed like it was the closest the pair have come, though, with the two wireless carriers reaching near-final merger discussions in October. However, that ultimately fell apart in November, with the two carriers unable to reach agreeable terms. T-Mobile’s CEO, John Legere, said that there needed to be a noteworthy improvement for its customers and shareholders, while Sprint’s own CEO, Marcelo Claure, noted the carrier’s “rich spectrum holdings” and other “significant assets” in comparison to T-Mobile.

Now, both The Wall Street Journal and Bloomberg have corresponding reports that outline T-Mobile and Sprint’s new efforts to talk about a merger in 2018. The two companies are hosting informal talks right now, so nothing is even moving forward just yet. However, that could change at any point in the near future, so banks are already jockeying to get in on the next steps.

A lot has changed since 2014, which has drastically changed the conversations between the two carriers. T-Mobile is now in third place in the U.S. wireless market as the “Un-carrier”, while Sprint has slipped to fourth. But both SoftBank (which is the leading shareholder of Sprint) and Deutsche Telekom AG (the parent company of T-Mobile USA) see a benefit to combining, and apparently won’t give up on the idea just yet.

Our Take

This is one of those situations where a final decision has to be made at some point, whether it’s for the merger or against it. Both companies have their own strengths and weaknesses, but the parent companies of both want to better compete against the likes of AT&T and Verizon, so merging might be the best way to do that. Then again, T-Mobile has been steadily climbing all on its own, so maybe it will be requesting a lot more from a merger this year.

[via The Wall Street Journal; Bloomberg]