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NEW YORK (AFP) ― No.3 U.S. mobile carrier Sprint is considering a bid for rival T-Mobile, a move that could shake up the wireless market, the Wall Street Journal reported Friday.
The report, citing unnamed sources familiar with the matter, said the deal could be worth more than $20 billion. But it also said the plan could be scuttled if it faces opposition from regulators.
Sprint in July closed a deal which allowed Japan’s SoftBank to take a controlling stake for $21.6 billion, after a bidding war with Dish Network and special concessions made to alleviate national security concerns about a foreign-owned telecom operator.
A merger of Sprint and T-Mobile ― the fourth largest in the U.S. ― would create a stronger number three player in the wireless sector, but would still be smaller than market leaders AT&T and Verizon, the newspaper noted.
A Sprint spokesman said in an email that the company “doesn’t comment on rumors and speculation.”
T-Mobile, which is controlled by Germany’s Deutsche Telekom, this year completed an acquisition of smaller carrier MetroPCS.
According to the Wall Street Journal, Sprint has not yet decided whether to move ahead with a bid. The report said the company may test antitrust officials’ reaction to a deal, and that a bad reaction could put an end to the effort.
AT&T sought to buy T-Mobile for $39 billion in 2011 but backed down amid opposition from U.S. regulators.
Telecom analyst Jeff Kagan said it remains unclear how U.S. authorities will respond to such a deal.
“I think SoftBank and Sprint would love to sink their teeth into T-Mobile,” Kagan said.
“It would transform them into a much larger and much stronger third place competitor, especially since they are both reinventing themselves as we speak.
The real question is would the U.S. government permit it? When they said no to the AT&T merger, they said it was to keep the top four wireless carriers separate for competitive reasons. If that is still the case then there is no chance of this merger happening.”
The SoftBank deal received clearance from U.S. national security officials in May under the condition of appointing an independent member to the Sprint board of directors to serve as security director.
The director, who must be approved by U.S. authorities, oversees national security matters and serves as a point of contact for U.S. agencies.
The deal was the largest overseas acquisition ever by a Japanese firm.
The report, citing unnamed sources familiar with the matter, said the deal could be worth more than $20 billion. But it also said the plan could be scuttled if it faces opposition from regulators.
Sprint in July closed a deal which allowed Japan’s SoftBank to take a controlling stake for $21.6 billion, after a bidding war with Dish Network and special concessions made to alleviate national security concerns about a foreign-owned telecom operator.
A merger of Sprint and T-Mobile ― the fourth largest in the U.S. ― would create a stronger number three player in the wireless sector, but would still be smaller than market leaders AT&T and Verizon, the newspaper noted.
A Sprint spokesman said in an email that the company “doesn’t comment on rumors and speculation.”
T-Mobile, which is controlled by Germany’s Deutsche Telekom, this year completed an acquisition of smaller carrier MetroPCS.
According to the Wall Street Journal, Sprint has not yet decided whether to move ahead with a bid. The report said the company may test antitrust officials’ reaction to a deal, and that a bad reaction could put an end to the effort.
AT&T sought to buy T-Mobile for $39 billion in 2011 but backed down amid opposition from U.S. regulators.
Telecom analyst Jeff Kagan said it remains unclear how U.S. authorities will respond to such a deal.
“I think SoftBank and Sprint would love to sink their teeth into T-Mobile,” Kagan said.
“It would transform them into a much larger and much stronger third place competitor, especially since they are both reinventing themselves as we speak.
The real question is would the U.S. government permit it? When they said no to the AT&T merger, they said it was to keep the top four wireless carriers separate for competitive reasons. If that is still the case then there is no chance of this merger happening.”
The SoftBank deal received clearance from U.S. national security officials in May under the condition of appointing an independent member to the Sprint board of directors to serve as security director.
The director, who must be approved by U.S. authorities, oversees national security matters and serves as a point of contact for U.S. agencies.
The deal was the largest overseas acquisition ever by a Japanese firm.
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Articles by Korea Herald
