Sprint abandons its planned takeover of T-Mobile

There's been plenty of talk in recent months about Sprint and T-Mobile - the third- and fourth-largest carriers in the United States, respectively - merging to create a 'mega-carrier' to take on the might of AT&T and Verizon. Posited as a merger, the move was in reality a takeover bid by Sprint's owners, Japanese communications giant Softbank, for T-Mobile US, which is owned by Germany's Deutsche Telekom. 

But whatever you call it, the deal is now dead in the water. The Wall Street Journal reports that Sprint has withdrawn its offer to purchase T-Mobile, and will continue to go it alone instead. 

The news comes as a bit of a surprise given that as recently as June, Reuters was reporting that the two companies had agreed the broad terms of the deal, with other sources claiming that the merged company would be known as 'Softbank USA'

Ultimately, it seems, the deal fell apart due to regulatory concerns. Even if it had been approved by the two companies' boards, it would still have needed approval by industry regulators - a long and costly process with no guarantee of success. Government officials, including the chairman of the FCC, had already expressed concerns about the potential acquisition, and it seems likely that Softbank lost its appetite for that fight, opting instead to spend its money on strengthening its existing position in the US market. 

T-Mobile has also received an alternative bid, from French company Iliad - although the $15bn on the table is less than half of the $32bn that Sprint was reportedly offering. According to the WSJ, T-Mobile has already rejected that offer. 

Sprint announced today that Marcelo Claure - founder of handset distribution giant Brightstar, which was acquired by Softbank last year - will replace Dan Hesse as its CEO from August 11. Hesse was expected to be replaced by T-Mobile CEO John Legere if the acquisition had been successful. 

Source: The Wall Street Journal via Engadget

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18 Comments

I was surprised that they had that much money to spend, but I think reality finally set in.
Their customers are fleeing, so they should fix their crappy service and try to get their customers back. The Facebook/Twitter phone sure isn't going to convince anybody...

Astra.Xtreme said,
I was surprised that they had that much money to spend, but I think reality finally set in.
Their customers are fleeing, so they should fix their crappy service and try to get their customers back. The Facebook/Twitter phone sure isn't going to convince anybody...

They been upgrading there networks, one of the reason there showing in the red past few quarters. There spending a lot recently on there infrastructure.

Astra.Xtreme said,
I was surprised that they had that much money to spend, but I think reality finally set in.
Their customers are fleeing, so they should fix their crappy service and try to get their customers back. The Facebook/Twitter phone sure isn't going to convince anybody...

I was considering investing some monies into sprint on the possibility that they would merge. Glad I didn't.

Jason Stillion said,

They been upgrading there networks, one of the reason there showing in the red past few quarters. There spending a lot recently on there infrastructure.

I was with Sprint last year and the data network was absolutely unusable for the 2 years I was with them. NYC, Chicago, Seattle, Milwaukee, etc all unusable. It did work okay in Boston, but that didn't help me much. A few of my friends are still with Sprint and they still have that same problem today.

I'm not sure what they're upgrading, but I think it's a little too late. The problem is they allow unlimited data, so people buy a cheap Android phone and tether their entire household on it.

Astra.Xtreme said,
I was surprised that they had that much money to spend, but I think reality finally set in.
Their customers are fleeing, so they should fix their crappy service and try to get their customers back. The Facebook/Twitter phone sure isn't going to convince anybody...

No one really uses its own money anymore. They usually backed by financial intuitions and/or providing stock options. Rarely they use their own cash reserves but then as stocks of the new company to sweeten the deal.

Jason Stillion said,
They been upgrading there networks, one of the reason there showing in the red past few quarters. There spending a lot recently on there infrastructure.

Not fast enough. I just gave Sprint up mid-June, 6 months before my contract would end simply because I couldn't be bothered to wait until November just to finish the contract.

Their response to me was a card with a number on it that I should call; they made no effort keeping me, nor resolving my reception issues. (it's kind of bad when you're in their damn store and don't have a signal...)

We (Houston) are getting ready to pass up Chicago as being the 3rd largest city in the United States. It's not like I'm out in the boonies...

nickcruz said,

I was considering investing some monies into sprint on the possibility that they would merge. Glad I didn't.

Where are you going to sprent your monies now?

Astra.Xtreme said,

I was with Sprint last year and the data network was absolutely unusable for the 2 years I was with them. NYC, Chicago, Seattle, Milwaukee, etc all unusable. It did work okay in Boston, but that didn't help me much. A few of my friends are still with Sprint and they still have that same problem today.

I'm not sure what they're upgrading, but I think it's a little too late. The problem is they allow unlimited data, so people buy a cheap Android phone and tether their entire household on it.

Actually sprint is just under equipped to handle the load, not just data but also voice and text.
You would have to have a lot of people tethering their household all at once in order to see any real slowdowns on a properly configured tower.

I remember when I had sprint people would call me and my phone sitting next to me would not ring but i would get a voicemail, come to find out that even though my signal bars were always high on my phone the calls would sometimes not get to me because sprint had oversold the tower capacity.

Order_66 said,
Actually sprint is just under equipped to handle the load, not just data but also voice and text.
You would have to have a lot of people tethering their household all at once in order to see any real slowdowns on a properly configured tower.

I remember when I had sprint people would call me and my phone sitting next to me would not ring but i would get a voicemail, come to find out that even though my signal bars were always high on my phone the calls would sometimes not get to me because sprint had oversold the tower capacity.


And not a whole lot has really changed. We've received notifications of Sprint "upgrading" the network on certain days, but it's been nothing noticeable. Two people with Sprint could text each other "I'm here!" and not receive the actual text for 10-15 minutes... :/

dead.cell said,

And not a whole lot has really changed. We've received notifications of Sprint "upgrading" the network on certain days, but it's been nothing noticeable. Two people with Sprint could text each other "I'm here!" and not receive the actual text for 10-15 minutes... :/

I always hated that delay. I did a city scavenger hunt competition a few years back where the clues were texted to you, and let's just say it was pretty clear who the Sprint customers were. :(

Astra.Xtreme said,

I was with Sprint last year and the data network was absolutely unusable for the 2 years I was with them. NYC, Chicago, Seattle, Milwaukee, etc all unusable. It did work okay in Boston, but that didn't help me much. A few of my friends are still with Sprint and they still have that same problem today.

I'm not sure what they're upgrading, but I think it's a little too late. The problem is they allow unlimited data, so people buy a cheap Android phone and tether their entire household on it.

I left them last year because I was in a good area and got the worst service ever. Went to AT&T and couldn't be happier to pay for service I can actually use.

I continue to use Sprint for the unlimited data. My only options where I live for home data is satellite or cell networks. We do a TON of video streaming and I do IT work, so a metered connection would not work for us (sometimes over 100GB\month). We are forced into using an unlimited 3G modem and two rooted LTE sprint phones.

But yes their service sucks. I have lost calls from recruiters and customers with a tower walking distance from my house. I am told they will finish working on their backbone sometime in September.

South Houston, Pasadena, Clear Lake is where I have lots of issues. I work on the northern side of Houston these days, but I couldn't bear sticking with Sprint long enough to find out if they worked up here.

Having moved into more of an IT position, I really needed my phone to work for when I didn't have internet access locally.

That wasn't the problem - the problem was that both the FCC *and* Justice Department have been rather outspoken about keeping T-M independent (entirely due to UnCarrier); basically, the concern was that a Sprint-owned T-M would scrap UnCarrier, as opposed to adopting it itself. However, can UnCarrier and an independent T-M survive?

Wasn't a French telecom named Iliad looking to possibly acquire T-Mobile? Dunno how I feel about that, but so long as we don't lose competition in the US, I'd be for it if it meant T-Mobile could have the bite to match their bark.

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