Sprint No Longer Bidding to Purchase T-Mobile

Unnamed sources told Reuters on Wednesday that Sprint has dropped its bid to acquire T-Mobile because regulators are showing no signs of dropping their opposition to the deal. The move is a major setback for Sprint parent company SoftBank Corp, based in Japan, who saw the deal as a way to take on AT&T and Verizon in the U.S.

Sprint is the No. 3 carrier in North America.

According to the report, Sprint and T-Mobile have not ruled out a consolidation in the future, but for now such a deal will likely not be approved because U.S. regulators want to keep the number of wireless carriers in the United States to just four major players.

"We didn't think the opposition would be this strong," a SoftBank executive told Reuters. "The environment will definitely change."

Effective August 11, 43-year-old Marcelo Claure will be Sprint's new Chief Executive Officer. He will replace Dan Hesse, who has served as CEO since 2007. Claure found his way into the Sprint fold thanks to parent company SoftBank Corp, which acquired his mobile phone distributor Brightstar Corp just last year.

The Reuters source said that Sprint had originally agreed to pay $40 per share, which was part of an agreement that included Deutsche Telekom AG, T-Mobile's majority owner.

However, Sprint isn't the only player gunning for T-Mobile; French telecom firm Iliad has offered $33 per share for a 56.6 percent stake in the company. Partners that may make the deal a bit more attractive include Dish Network, Cox Communications and Charter Communications.

Roger Entner, analyst at Recon Analytics in Boston, told Reuters that the announcement could indicate that the "tables may have turned" on Deutsche Telekom. "As long as there was a Sprint offer on the table, bargaining power was with Deutsche Telekom. Now the bargaining power is with Iliad," he said.

T-Mobile is currently a hot ticket because of its aggressive pricing plans and no-contract campaigns. The company is even offering potential customers to pay their early termination fees if they dump their current carrier and switch to T-Mobile.

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  • pills161
    Glad this didn't go through, I've had Tmobile for years and wouldn't want to become a Sprint customer.
  • velocityg4
    What I don't get is if Deutsche Telekom wants to drop T-Mobile USA so badly. Why not just let the free market settle on a price instead of finding one entity to buy it outright? Just sell the shares through the stock market and let it become it's own corporate entity again.
  • Chris Droste
    sprint as an owner didn't make any sense to me infrastructure-wise anyway. Sprint's on CDMA while T-mo is GSM-based. i think even their LTE bands are different. but i Imagine that spectrum that VZ bought, then sold that T-mo now owns could make it pretty appetizing for LTE build out. I just really wanna know why the fu- did their data suddenly goto hell in my work building but outside it's fine in just the last month.