Sprint, T-Mobile Are Never, Ever, Ever Merging Again

Wireless carriers end talks after years of dancing around a merger
By Newser Editors and Wire Services
Posted Nov 5, 2017 9:07 AM CST
Sprint, T-Mobile Are Never, Ever, Ever Merging Again
In this 2010 file photo, a woman using a cell phone walks past T-Mobile and Sprint stores in New York. Sprint and T-Mobile called off a potential merger.   (AP Photo/Mark Lennihan, File)

Sprint and T-Mobile called off a merger, reports the AP, saying Saturday that they couldn't come to an agreement that would benefit customers and shareholders after years of dancing around a merger. "The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders. However, 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 compared to our outstanding stand-alone performance and track record," said John Legere, president and CEO of T-Mobile US. T-Mobile and Sprint are the US' third- and fourth-largest wireless carriers, respectively, but they are significantly smaller than AT&T and Verizon, who effectively have a duopoly over US wireless service.

The two companies had hoped to find a way of merging to make the wireless market more competitive. Sprint and its owner, the Japanese conglomerate SoftBank, have long been looking for a deal as the company has struggled to compete. But Washington regulators have frowned on a possible merger. DC spiked AT&T's offer to buy T-Mobile in 2011 and signaled in 2014 they would have been against Sprint doing the same thing. Sprint has a lot of debt and a string of annual losses. The company has cut costs and made itself more attractive to customers, BTIG Research analyst Walter Piecyk says, but it hasn't invested enough in its network and doesn't have enough airwave rights for quality service in rural areas. T-Mobile, meanwhile, has been on a yearslong streak adding customers. "T-Mobile does not need a merger with Sprint to succeed, but Sprint might need one to survive," Piecyk wrote in an October research note.

(More Sprint stories.)

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