Sprint, T-Mobile call off merger
SAN FRANCISCO/NEW YORK (Reuters) – Sprint Corp. and T-Mobile US Inc. said on Saturday they have called off merger talks to create a stronger US wireless company to rival market leaders, leaving No. 4 provider Sprint to engineer a turnaround on its own.
The announcement marks the latest failed attempt to combine the third- and fourthlargest US wireless carriers, as Sprint parent SoftBank Group Corp. and T-Mobile parent Deutsche Telekom AG show unwillingness to part with too much of their prized US telecom assets.
A combined company would have had more than 130 million US subscribers, behind Verizon Communications Inc. and AT&T Inc.
The failed merger could also help keep wireless prices low as all four providers have been heavily discounting their cellphone plans in a battle for consumers.
“Consumers are better off without the merger because Sprint and T-Mobile will continue to compete fiercely for budget-conscious customers,” said Erik Gordon, a Ross School of Business professor at the University of Michigan.
The companies’ unusual step of making a joint announcement on the canceled negotiations could indicate they still recognize the merits of a merger, keeping the door open for potential future talks.
Sprint and T-Mobile said they ended talks because the companies “were unable to find mutually agreeable terms.”
John Legere, chief executive of T-Mobile, said in the statement the prospect of combining with Sprint was compelling, but “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 standalone performance and track record.”
Sprint CEO Marcelo Claure said that even though the companies could not reach a deal, “we certainly recognize the benefits of scale through a potential combination.”
Claure also said Sprint has agreed it is best to move forward on its own with its assets “including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth.” Failure to clinch an agreement leaves SoftBank CEO Masayoshi Son, a dealmaker who raised close to $100 billion for his Vision Fund to invest in technology compa- nies, needing to find another option for Sprint.