Back in 2014, Sprint and T-Mobile nearly finalized their nuptials (and the prenup) for their expected merger. But, the two never went forward with the marriage — so to say. So earlier this year when it was reported the two telecoms were back on speaking terms, everyone got excited for a wedding once again. Now, the wireless connectivity deal isn’t looking so promising.
After months of negotiations, it looks like the expected merger of American telecom’s Sprint and T-Mobile has once again fallen through. The two telecommunications companies are the third and fourth largest in the country, and the merger talks to unite them against the AT&T and Verizon seemed imminent. Yet, earlier this week’s reports started swirling that Softbank — the owner of Sprint — is said to have walked away from the deal.
Reports on this stretch from “ego’s clouded judgment” to “Softbank just doesn’t want to give up a majority”. But, it’s pretty clear the two go hand-in-hand. There’s been talk that Deutch Telekom, the owners of T-Mobile, want a controlling stake of the wireless connectivity company and Softbank just wasn’t ready to give it up.
This is a much different breakup than the two wireless connectivity telecoms had last time around. In 2014, merger talks fell through over regulatory concerns. Even if today’s deal did go through, we expect the companies would have faced the same scrutiny and possibly even seen the deal fall through once again on the same principals. Although, with a Trump administration in place at the FCC, not everyone’s convinced of that.
So, what’s the deal here? Well, for now, it looks like we won’t be seeing a Sprint and T-Mobile merger. Although Sprint is the one that walked away from the deal, it’s still not clear if that was a totally good move.
What Could Have Been … Fast 4G, But Higher Prices
Sprint’s service and spectrum is far less superior, and T-Mobile has actually seen substantial growth over the past few years that could have really brought Sprint’s wireless connectivity to a whole new level. For example, Light Reading reported in their last State of Mobile Network reports that Sprint had 4G download speeds of just 9.6 Mbit/s, whereas T-Mobile had an average of 17.5. Yikes.
On the other hand, the two could have gone through with the entire planning, paid for the reception, and walked down the aisle only to have the FTC stand up and object at the very last minute. For consumers, it could have also been a nightmare — as some (Sprint) customers probably would have had to switch devices and plans — because expanding and combining two networks is no easy task. The merger also had the potential to drive up the price.
Will They Get Back Together?
Just because this deal fell through, doesn’t mean it couldn’t be put back on the table. It also doesn’t close the doors for other telecoms to swoop in and try and make a deal with Sprint or T-Mobile. If that does happen, we can expect the same regulatory scrutiny — as well as the same difficulty integrating wireless connectivity networks and upgrading important technology like 4G.
Unlike traditional carriers, at Custom Connect, we can actually provide 4G network anywhere in the world to connect global businesses. By integrating mobile technology with fixed lines we created Blended Connectivity — supplying fast, global, reliable connections to global businesses. Interested in learning more? Get in touch, or head over to the blog.