CNBC reports that Softbank still has goals of a Sprint / T-Mobile merger becoming a valid number three carrier in the U.S. and it has a novel way of getting it to happen this time: giving control of Sprint to Deutsche Telekom and becoming a minor partner in a new combined network.
In 2014, Softbank, which owned Sprint after a $21.6 billion 2013 investment, was set to purchase T-Mobile from Deutsche Telekom. Both parties had agreed on terms and regulatory approval was the last step. The merger was denied by U.S. lawmakers and Softbank set its eyes on making Sprint a profitable and viable third-place carrier with plans to move on AT&T and Verizon's dominance.
Both companies involved are having a good day in the market with Sprint shares up more than 3.5% and T-Mobile shares up over 4%.
That also didn't pan out as planned, and now Softbank is discussing an end-around play that would make Bill Belichick proud. The company thinks it can relinquish control of Sprint to Deutsche Telekom (for a healthy sum, no doubt) so the German communications giant can merge T-Mobile and Sprint on its own. Softbank would hold a minority ownership of the company and the assets from both DT and Softbank could be enough to push against the current duopoly in the U.S. telecommunications market.
While both companies declined any official comment to CNBC, Softbank Chief Executive Masayoshi Son told analysts in February, "We may buy, we may sell. Maybe a simple merger, we may be dealing with T-Mobile, we may be dealing with totally different people, different company."
While Sprint has struggled to gain ground, T-Mobile has made strides with customer growth quarter after quarter since a failed AT&T buyout in 2011. Combining the customer base and network footprint of the two companies would move closer to the big lead Verizon and AT&T hold in the U.S. market. Everyone makes money and all is well in the world of expensive suits and boardrooms.
Of course, there's no telling how any FTC or FCC ruling would go were this to happen, and as of today, everything is still speculation. We'll all just have to wait and see how things play out and hope that whatever happens is good for customers as well as corporate bank accounts.
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