SoftBank eyes Sprint, T-Mobile deals – CNBC (Feb 17, 2017)

This isn’t a huge surprise – ever since Donald Trump won the US presidential election in November, the odds of a deal involving Sprint and T-Mobile have gone way up, because the incoming administration is likely to be much friendlier to consolidation. However, that’s no guarantee that a deal will get done – last time around SoftBank was the driving force behind the deal and very keen to control the resulting entity, whereas at this point it seems a lot less committed to its US wireless adventure. At the same time, T-Mobile USA is performing much better as an investment for Deutsche Telekom, making it less likely to sell. One option would be for Deutsche Telekom to take over Sprint, but it’s far from clear that it wants to (and it would certainly be awkward regardless given TMO CEO John Legere’s constant belittling of Sprint). Then, of course, there’s the question of whether a merger is a good idea. On the one hand, scale continues to be enormously important in the market, and Sprint and T-Mobile have a big disadvantage here, but on the other T-Mobile has been pretty well anyway by itself, while Sprint has been doing far less so (or growing by sacrificing margins and revenues). And it will be very hard to argue that a merger at this point would be good for competition, even with Republicans in charge at the FTC, DoJ, and FCC.

via CNBC


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