No Sprint/T-Mobile US merger until September
30 July 2014 | Kavit Majithia
A merger between US players Sprint and T-Mobile US is not likely to surface until September, according to sources close to the companies.
Both operators are still reportedly undertaking due diligence and preparing its case for the merger to the US regulator, the FCC.
Japanese player SoftBank, which owns a majority stake in Sprint, and Deutsche Telekom-owned T-Mobile US have agreed to the deal in principle, which will see Sprint acquire T-Mobile US for approximately $32 billion, according to reports.
The deal is facing heavy regulatory scrutiny due to a range of factors, including the size of the deal, key terms such as break-up fees, and the companies preparing a case to convince regulators to approve the merger, which will see the US market shrink from four mobile players to three.
The FCC has expressed its doubts over the deal, claiming there should be two operators that compete with AT&T and Verizon. A combined Sprint/T-Mobile US unit will also still fall short of the market leaders, with 100 million subscribers.
SoftBank is likely to argue that pending mergers in the US market, including Comcast’s deal to acquire Time Warner Cable (TWC) and AT&T’s acquisition of DirecTV will further marginalise Sprint and T-Mobile US.
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