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Sprint and T-Mobile end merger negotiations

05 November 2017

Seemingly, Softbank Group and T-Mobile's owner Deutsche Telekom were unable to agree on the ownership ratio for the partnership.

Sprint CEO Marcelo Claure said that even though the companies could not reach a deal, "we certainly recognize the benefits of scale through a potential combination".

It was speculated that Softbank would seek to end negotiations earlier this week, but, according to The Wall Street Journal, T-Mobile has a new offer on the table that Sprint is considering. "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 John Legere, president and CEO of T-Mobile US, in a prepared statement. The tone of the release suggests T-Mobile and Sprint are still on pleasant enough terms, so it's not unthinkable to imagine the two to partnering in some capacity in the future.

T-Mobile and Sprint are the U.S.′ third- and fourth-largest wireless carriers, respectively, but they are significantly smaller than AT&T and Verizon, who effectively have a duopoly over US wireless service.

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The two companies came close to announcing a merger in 2014 but called it off at the last minute due to regulatory concerns.

Previous attempts have been made to court T-Mobile, but they appear to have run into trouble with federal overseers. If the companies had struck a deal this year, they would have had a better chance of getting government approval under the Trump administration. Now that nothing has changed, Sprint remains in a vulnerable position, having reported annual losses for ten consecutive years.

T-Mobile has been particularly aggressive - and successful - in challenging its two larger rivals.

Sprint and T-Mobile end merger negotiations