Categories Technology

Survival instinct brings Sprint and T-Mobile back to the merger table

The Sprint (S)- T-Mobile (TMUS) saga is back once again. The wireless carrier rivals have apparently reignited merger talks that were suspended last year due to a valuation disagreement. They are now back to the merger table, partly because the two intent to cut down on the financial stress of investing in their networks and competing in a saturated market.

Courtesy – Flickr

The talks between the two key players — that could drastically change the dynamics of the US wireless industry — came about four years back in 2014.  The duo, in the past four years, have abandoned the deal thrice, as both were either preoccupied with other deals or were concerned about the intense scrutiny by the antitrust regulators. With this merger, the companies plan to compete against the top two carriers – Verizon (VZ) and AT&T (T).

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.

Most Popular

Earnings calendar for the week of May 17

Benchmark stock indexes pared their recent gains early this week amid elevated inflation concerns, but regained a part of the momentum later aided by recovery in tech stocks. The Dow

Aurora Cannabis (ACB) Earnings: 3Q21 Key Numbers

Aurora Cannabis Inc. (NYSE: ACB) reported third quarter 2021 earnings results today. Total revenues fell 25% year-over-year to CAD55.1 million. Adjusted EBITDA loss amounted to CAD24 million. Cash balance as

Walt Disney (DIS) Q2 revenue down 13%; earnings beat estimates

Media behemoth The Walt Disney Company (NYSE: DIS) reported second-quarter revenues that declined from last year as customers stayed away from theatres and parks due to pandemic-related safety issues and

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top