T-Mobile and Sprint in talks of a merger, again
The stock price of both T-Mobile and Sprint have each increased in light of new rumors that talks of a merger between Sprint and T-Mobile have rekindled. The last time we heard of this was from German media in June.
This morning, CNBC reported that “people close to the situation” have said that negotiations are weeks away from reaching a verdict with the chance of reaching an agreement up in the air. The two companies are said to be actively engaged in figuring out the terms of a possible agreement.
This time around, Softbank would become a large minority holder of T-Mobile which would mean that T-Mobile CEO John Legere would be expected to lead whatever the resulting merger is. However, CEO of Japanese Telecom company: Softbank (parent company of Sprint) CEO Masayoshi Son wants to have a say in how the company is run, which adds an extra layer of complications to the potential transaction.
Aside from deciding who would run the merged carriers, antitrust regulators would have to approve the merger. Antitrust laws help to regulate mergers from becoming less competitive. In other words, it may be a bad idea to reduce the number of major carriers from four to three in order to keep the industry competitive.
Seeing that T-Mobile has been the market disruptor for the past few years who has been shaking up the mobile industry in the US and is responsible for making the industry super competitive again, it could very well be given the green light. This is of course, assuming that terms and negotiations between the two parent companies are agreed upon.
What do you think of #4 and #3 merging? Would it make for a more competitive mobile industry in the US?
