26 Comments

Summary:

No matter how bad an idea a Sprint-T-Mobile merger might be or how much regulatory scrutiny it might face, the two companies some committed to going through with it. They could announce as early as July.

The combination of T-Mobile US and Sprint may be a horribly misguided idea and a potential lodestone on U.S. mobile competition to boot, but apparently it’s getting closer to becoming reality.

Bloomberg and several other news outlets are reporting that Sprint and T-Mobile — and their primary owners SoftBank and Deutsche Telekom — are close to arriving at the specific terms. DT was holding out for $40 a share, while SoftBank was offering a price in the upper thirties, so the two have settled on a price near $39 a share, Bloomberg sources said, though they didn’t reveal a specific number.

At that valuation, T-Mobile would be worth $31.3 billion, and once you factored in its debt and cash, the cost of buying T-Mobile would rise to about $40.8 billion, Bloomberg pointed out. The deal could be announced as soon as July.

Of course, agreeing to deal is the easy part. When — and if — these companies finalize their terms, they’ll then have to convince shareholders as well as a U.S. regulatory system that has become increasingly and justifiably hostile to these kinds of mega-mergers among the nationwide mobile carriers.

Meanwhile, SoftBank CEO and new Sprint chairman Masayoshi Son has been proselytizing the merger to any audience he can find. He won’t mention T-Mobile by name, but he’s saying plenty of outrageous things – like promising to rejuvenate home broadband as well as mobile competition in the U.S. – to justify the deal.

  1. it would help for t-mobile to come out and inform there customers that should the merger succeed they will not be migrated over to the sprint network until such time that it performs at minimum equivalent to the t-mobile network prior to the merger.

    if not i would not be surprised to see a mass exodus from t-mobile.

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    1. Kevin Fitchard Wednesday, June 4, 2014

      Hey Frank,

      Ha! I wouldn’t count on it. Like all mobile mergers of the last few years, this merger will be about cannibalization. Someone’s spectrum will get eaten by other (not necessarily T-Mobile’s though). That means about 40 million customers will get screwed on one side or the other.

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    2. Except that Sprint has far more native coverage. I’m not exactly sure how that makes Tmobile’s network better.

      John B.

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      1. Coverage is a pretty fuzzy term. Voice coverage is increasingly irrelevant. Sprint’s voice network may be acceptable, but their data is a train wreck. Coverage does not equal better technology.

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    3. casualsuede Monday, June 9, 2014

      I see it the other way around. I have a feeling that Sprint will dump the Clear 2.5 GHz spectrum (maybe sell it to Dish). Sprint has far too much spectrum now and with the AWS banding they get from the T-Mobile/MetroPCS merger, they will be free to switch to a GSM based system, until VoLTE comes into play.

      a GSM based system is beneficial on two fronts. It gives Sprint true Global Roaming and GSM based devices are often cheaper than their CDMA cousins.

      I am not sure what band classes both carriers use, but as long as they are not too different (like their 2.5 GHz spectrum), it should be a good fit.

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      1. I’m no stock wiz. Just a consumer. When I purchased an unlocked phone, I was given my Sprint SIM card. In my handset settings, I can switch to accept CDMA or GSM. The handset will not work on Sprint if set to CDMA, only GSM. When contacting technical support, I was told , ” if you should purchase another handset, it MUST be GSM compatible. Otherwise, it will not work on our network.” Maybe tech support new something other people didn’t.

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  2. i would also like to see a commitment that a merged t-mobile/sprint would be committed to using SIM swap able(without any IMEI pairing) handset as t-mobile does now and not tie service to the phone as sprint does now.

    if i hear this and what i mention above i may have less objection than i do now.

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  3. fcc will block it and sprint owns t mobile 1 billion dollars. Lol why would sprint merge with t mobile, sprint is losing so many customers by end of this year they would have no customers left i feel bad for sprint haha their network is soo bad.
    if the merge gets blocked sprint owns t mobile 1 bilion dollars, lol. so t mobile will be 1 billion dollar richer.

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    1. From your mouth to FCC’s ear. Tmo has earned my loyalty by being the rogue network and it would kill me to see that end.

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  4. Joshua Groenke Wednesday, June 4, 2014

    I hope you were not paid to write this “article”.

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    1. I hope you were not paid to write this “comment”

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  5. Merger benefits always…ALWAYS..are false promises. At this scale, it will be of no benefit to consumers. Sprint is, and has been for 30 years, a terrible company. Having it consume T-Mobile is good for no one but Sprint.

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  6. The different flavors of radios wouldn’t be that bad long term. Everything will move toward LTE, the problem is the fallback networks they choose to keep up. If they plan to keep GSM going, that would be ok by me. It would probably make them more ideal as a European take-over target too.

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    1. casualsuede Monday, June 9, 2014

      I think they will. GSM offers two benefits. True Global roaming and cheaper device pricing. If Canada can go from 40% GSM to 100% GSM in a year or two, Sprint can maintain the CDMA network until all the customers can move over.

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  7. DT has been trying to exit the US market for years. may as well give it another go.

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  8. Does that mean my contract with T-Mobile is null and void or do they owe me an early termination fee for changing what I signed up for. They would be all over me for fees, why should they not have to pay me for switching me to Sprint without my permission. ;)

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    1. T-Mobile Uncarrier Phase 1, got rid of contracts for new subscribers. That was a little over a year ago. The only obligation they have to T-Mobile is their monthly service, and the cost of the device. (Which is fair, you pay for your use.)

      Let’s assume that someone signed up for service a few days prior to Uncarrier Phase 1, then they’d have signed a contract for two years. One year has gone by, already. Assuming the Merger goes through, it’s extremely likely that they’ll take a few months to figure out restructuring, and then make a commitment to maintain the network, to be decommissioned, until customers have a chance to migrate devices. (A few months, to about 3 years. Depending on a series of factors.) By this time, the pre-Uncarrier Phase 1 contract will have expired and you’d be on a grand-fathered plan, which would then be converted into a Simple Choice plan.

      (Either one of the networks will be alive for a year, or longer, to accommodate the 40+ million customer migration. They will also have to allow their MVNOs to take action if they want to continue to offer service since they will have to update their phone selection to match the new carrier’s technology.)

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  9. Sprint network is garbage. They should go bankrupt.

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  10. T-Mobile hasn’t forced metro pcs to close yet. Good their new owner is cdma company

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    1. casualsuede Monday, June 9, 2014

      They will go to GSM. They are waiting until the MetroPCS customers to upgrade, as they will with Sprint.

      Their bigger problem with Sprint are the different bands and frequency’s each company uses. TMO and MPCS were a good fit because they were both AWS carriers. Switching from CDMA to GSM is not as hard as creating a device that can use all the different band classes.

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    2. T-Mobile lies Tuesday, June 10, 2014

      They are eventually closing everything Metropcs down, employees are starting to get laid off. It should all be gone by the end of July

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