Sprint is readying a potential bid for T-Mobile US, with the rumored acquisition tentatively scheduled for the first half of 2014, insiders claim, and possibly worth more than $20bn. The merger, which would see the third- and fourth-largest carriers in the US market join forces, is still being weighed up by Sprint, sources tell the WSJ, and is likely to come in for particularly close attention by the US Justice Department, which may well put the brakes on the deal.
Regulators are concerned, it’s suggested, because of the benefits for consumers of having four carriers. Should Sprint and T-Mobile US be allowed to merge, the US market would then be dominated by three national options, and potentially see prices rise as a result.
It’s not the first time a possible deal has been weighed, though this time around it’s said to be Japanese carrier SoftBank’s CEO, Masayoshi Son, driving momentum. The chief executive – who acquired the controlling stake of Sprint earlier in 2013, with SoftBank now owning in excess of 80-percent – is believed to be keen to grow the carrier’s holdings in the US market.
Sprint and T-Mobile US would, on the face of it, make for a decent pairing, at least technically. T-Mobile’s non-urban coverage is lacking, somewhere Sprint could help fill in, for instance, though it would require a considerable build-out of infrastructure given the differences between the technologies each uses.
Both carriers have previously argued that a partnership is vital if they’re to compete on scale with Verizon and AT&T for 4G roll-outs and beyond.
On the flip side, AT&T’s high-profile attempt to buy T-Mobile US two years ago was abandoned after regulators made clear they thought it would be anti-competitive, and in fact Sprint itself was a vocal critic. Similar opposition may well surface for any attempt by Sprint to do the same, even with the carrier being smaller than its GSM rival.
Of course, with Sprint still said to be undecided on whether or not to go ahead with a deal, it’s still early days for any actual acquisition plans. Neither carrier has commented on the possibility.