Shares of both the company surged following the announcement. However, the talks are said to be in the initial stage — so the chances of the deal falling apart is high given their past record.
In the past, the companies failed to finalize the deal due to the differences between the Germany-based Deutsche Telekom that hold nearly 63% stake in T-Mobile and SoftBank, the Japanese telecom giant that holds 85% stake in Sprint.
A big question that exists now is whether the US regulators will allow the deal to go through smoothly, considering the antitrust case between AT&T and the Justice Department. AT&T is being sued by the Justice Department for pushing with its $85 billion Time Warner (TWX) acquisition, which the regulators claim will harm the consumers. Even if the two companies settle on merger talks, they will need the sanction from the regulators.
Considering the deals the top two rivals are striking, Sprint and T-Mobile have nothing much left to do to stay relevant, but to combine.