Deutsche Telekom has confirmed an end to merger talks between its subsidiary T-Mobile US and Sprint. The German operator said "an agreement about the general framework of such a merger could not be reached".
T-Mobile and Sprint also confirmed the news in a joint statement, saying they saw significant benefits of scale from merging the third and fourth largest mobile operators. "However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record," said T-Mobile CEO John Legere. He said T-Mobile will continue on its own with its 'Un-carrier' strategy.
Sprint CEO Marcelo Claure, who is also on the board of parent company Softbank, said the company would seek new opportunities in convergence. "As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries," he said in the statement. This suggests the company may pursue the reported talks with cable operator Charter on a merger. Separately, Sprint also announced a new agreement for cable operator Altice to use its mobile network.
The Sprint-T-Mobile merger talks restarted this summer, after the spectrum auction in the US was completed. The two had tried merging in 2014 but called off the deal due to regulatory opposition. The new Trump administration was thought to be more sympathetic to the merger but the mobile operators were reportedly unable to reach agreement on control of the merged company.
In a presentation of interim results, Softbank CEO Masayashi Son said he was open to restarting the talks if his company could secure control in the merged company, Reuters reports from Tokyo. Son said that "the door is open" if its management rights are preserved.
The CEO reiterated Softbank's commitment to Sprint, saying: "Even if it is tough for the next three or four years, on a five or ten year timescale scale it is a strategically indispensable company." Softbank separately announced that it's increasing its stake in Sprint to 85 percent from 83 percent, the maximum allowed before the company must launch a public bid for all of the shares. Softbank said it did not intend to go beyond the 85 percent limit.
