Sprint and T-Mobile Inch Closer to $32 Billion Merger

Discussion in 'Android News' started by dgstorm, Jun 5, 2014.

  1. dgstorm

    dgstorm Editor in Chief Staff Member Premium Member

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    The next step in the proposed merger between T-Mobile and Sprint has commenced, bringing it ever closer to reality. The two companies have actually ironed out some details now. Sprint plans to pay T-Mobile $40 per share, in a 50% stock & 50% cash split deal later this summer. This would amount to a $32 Billion total cash price for the company, although Germany’s Deutsche Telekom AG, would still retain a 15% to 20% stake in the new company.

    On top of this, the merger will also include a $1 billion+ (cash and other asset) break-up payment from Sprint to T-Mo if the deal falls through. This is similar to what happened when AT&T tried to buy T-Mobile in 2011. Of course, just like in that failed AT&T deal, even though this next big step has progressed forward in the process, that doesn't mean the deal will go through. There's still the huge hurdle of convincing the U.S. FCC and Department of Justice that this merger will be good for consumers and the market instead of harmful.

    That's a pretty big hill to climb. In 2011, it was Sprint who supported the U.S. government's decision that the U.S. needed four carriers for the mobile industry to remain competitive. It seems a bit hypocritical of Sprint to now be arguing the opposite viewpoint. Of course, that is not an Apples to Oranges comparison. AT&T was/is already one of the two biggest forces in the mobile sector, whereas both Sprint and T-Mobile are much smaller and less successful. There is a compelling argument to be made that competition would be improved by having three strong competitors instead of two powerful ones and two weak ones.

    What are your thoughts?

    Source: WSJ
     
  2. UltraDroid

    UltraDroid DF Super Moderator Staff Member

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    As long as Sprint switches their system to GSM, like 80% of the world, I'm OK with it.
     
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  3. shockracer

    shockracer Active Member

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    Buckle up Verizon, you're going to be taken for a ride!
     
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  4. cr6

    cr6 DF Super Moderator Staff Member

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    T-Mobile & Sprint combined will barely come close to the same coverage as Verizon, let alone taking a number of years to fully merge. Neither company has quality or widespread coverage where I live. I seriously doubt Verizon is worried much about this merge. I do however think it will be good for those customers on one of these two carriers, (eventually) so there's that.
     
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  5. cereal killer

    cereal killer DF Administrator Staff Member

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    I love how Sprint was all up in arms over the AT&T/T-Mo merger and now they are pushing for this one. Gotta love hypocrisy. The FCC and DOJ will shut this down I believe. Why? Same reason they shot down the AT&T/T-Mo merger.
     
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  6. Jeffrey

    Jeffrey DF Administrator Staff Member Premium Member

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    Very true. Keep in mind Deutsche Bank is a major TMO stockholder and Softbank a major Sprint stockholder. If the transaction is done offshore, they can circumvent the FCC and DOJ.
    I guess the question is, does a foreign owned entity need FCC and DOJ approval?
     
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  7. cereal killer

    cereal killer DF Administrator Staff Member

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    Excellent point/observation. I would_think_yes if they plan to operate in the US.
     
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  8. Jeffrey

    Jeffrey DF Administrator Staff Member Premium Member

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    The DOJ and FCC's concern is dropping to 3 major carriers which may force prices up. Personally, I don't think it will happen.

    Softbank being the largest telecom in Japan needs this merger to offset their mobile losses in Japan. Voice/SMS communications have dropped considerably do to the free app Line.
     
  9. blacksoxing

    blacksoxing Active Member

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    Two services that aren't known at all for their "quality" taking on VZ????

    Dirt + Mud doesn't equal shine, son....someone who has VZ is someone who wants the "best", or has an unlimited plan. Else, VZ would have been deserted awhile ago!