It’s official: Sprint and T-Mobile have called off talks about a potential merger following months of negotiations that, at one point, likely had investors fairly excited about the potential of a huge new rival to AT&T, the nation’s second-largest carrier. The two companies issued a joint statement Saturday to announce their big breakup.
T-Mobile President and CEO John Legere’s side: “The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders. 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.”
“Going forward, T-Mobile will continue disrupting this industry and bringing our proven Un-carrier strategy to more customers and new categories – ultimately redefining the mobile Internet as we know it. We’ve been out-growing this industry for the last 15 quarters, delivering outstanding value for shareholders, and driving significant change across wireless. We won’t stop now.”
Sprint President and CEO Marcelo Claure’s side: “While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination. However, we have agreed that it is best to move forward on our own. We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth.”
“As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries. We are determined to continue our efforts to change the wireless industry and compete fiercely. We look forward to continuing to take the fight to the duopoly and newly emerging competitors.”
Had Sprint and T-Mobile successfully combined forces, the resulting carrier—whatever the name may have been—would have had more than 130 million U.S. subscribers. That would have given it a strong foothold against top-dog Verizon, at just around 150 million subscribers, and AT&T, at approximately 140 million.
Eyes now turn to Sprint, the nation’s fourth-largest carrier at approximately 50 million subscribers. According to Reuters, industry analysts are concerned that the carrier’s growth—driven by heavy discounting—just isn’t going to give keep the carrier competitive in a Verizon- and AT&T-dominated market. Worse, Sprint owner SoftBank appears to be running low on options to deal with the considerable amount of debt Sprint carries.
Even if the two companies had worked out their differences, there was also no guarantee that a proposed merger would pass U.S. regulatory scrutiny—one of the reasons Sprint called off merger talks with T-Mobile years ago.
Source: Technology – Google News