A few months back, we reported that T-Mobile and Sprint were in talks for a potential merger, months after a previous attempt. Previously, problems relating to the US Department of Justice may have posed a problem to the telecom giants in America, but doubts about the Trump administration's views meant that the merge may have been able to go ahead. Now it seems that the potential merger has been dropped entirely, largely due to how much control of the Sprint telecom SoftBank would have to give to Deutsche Telekom, the parent company of T-Mobile. SoftBank's chairman and founder, Masayoshi Son, allegedly is afraid of giving up too much control of the company. Not only that, it seems that the two firms struggled to come to an agreement on the valuation of Sprint's shares. Talks may still be revived at any time, but for now, sources close to the companies claim talks have been dropped.
The previously mentioned reaction of the stock market towards Sprint's shares may also come into consideration. Sprint's shares have dropped for months, along with the profitability of the firm. The company has been hemorrhaging money for several years now, and that coupled with its dropping share prices means that the companies cannot agree on a valuation of Sprint's shares. People close to Sprint claim that the company now wishes to invest money into its services. T-Mobile's shares have dropped recently too, as a result of this potential union being allegedly dropped. However the company has been in a much stronger position than its prospective merger in recent years.
We'll see if talks pick up again between the companies, but for now, it seems the deal is off. This is a good thing for those who may have been afraid of a stronger oligopoly in the American telecoms market, so we'll see what happens next.
Source:
The Wallstreet Journal
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