SoftBank Accelerates Sprint/T-Mobile Speculation

The industry’s least-secret mega merger possibility of 2017 is on people’s minds on this long holiday weekend (for the US anyway). Softbank, which owns some 80% of Sprint, has apparently said that it is prepared to cede control of the #4 US wireless carrier to T-Mobile US if that’s what it takes to make a deal happen. 

T-Mobile US’s parent DT has indicated it’s not willing to sell the company anymore, and T-Mobile US’s 68M subscribers and ongoing growth in a saturated market have definitely strengthened their hand. But Softbank is apparently more interested in making its investment work than it is in running the show, so they are signaling that they would be fine letting DT have the reins.  The markets are taking the idea seriously, and all three stock prices surged in response.

With the new Trump administration seen as more amenable to a deal that would leave three major wireless carriers instead of four than the Obama administration was, many expect SoftBank to take another shot. They might have tried already but there’s a spectrum auction going on that puts a damper on actual merger talks for another couple months.  Given the pace of things in the last 30 days, it’s hard to make many guesses what the overall environment in April will be like.

And yet there is another possibility getting a bit of press. Softbank isn’t the only one regulators blocked from buying T-Mobile US. Could AT&T throw a grenade into the room and raise its bid from the dead? With the Time Warner deal to work on already, such a deal would be slightly… let’s say ‘unhinged’. But in 2017 so far it’s been hard to rule anything out, and I do mean anything. Maybe Russian operators MTS or MegaFon will make a bid instead. Just kidding!

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Categories: Mergers and Acquisitions · Wireless