Sprint’s pursuit of rival T-Mobile US appears to be moving forward unabated as reports have surfaced that Deutsche Telekom has accepted an offer by Softbank for their respective subsidiaries to merge.
Reuters reported that Japan’s Kyodo news service, citing industry sources, claims Softbank Chairman Masayoshi Son proposed terms at a meeting with DT management earlier this month, which has since been accepted by the German telecom giant. Financial terms were not reported.
DT currently owns a controlling stake in T-Mobile US, which was diluted last year following T-Mobile US’ acquisition of MetroPCS. DT had for years cited its U.S. operations as core to its international business, but has since wavered a bit on that support. T-Mobile US has become the leadership of charismatic CEO John Legere.
Son’s Softbank acquired control of Sprint last summer, with Son in recent months aggressively lobbying for an acquisition of T-Mobile US in order to gain greater scale in competing against larger rivals Verizon Wireless and AT&T Mobility. Sprint has struggled operationally over the past several years as it undergoes its Network Vision program that will see the carrier streamline network operations, but has also caused service disruptions.
A combined Sprint/T-Mobile US, which has been rumored for years, would nearly match the more than 100 million customers currently served by both Verizon Wireless and AT&T Mobility, with Son claiming once he has the scale, he would unleash a pricing war on the market.
Government regulators have been cool to such a tie up, seeming to be comfortable with the current four nationwide operators. T-Mobile US’ recent success has also bolstered that preference following the government’s refusal to approve AT&T’s previous attempt to acquire T-Mobile US.
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