T-Mobile, Sprint Merger No Longer Pushing Through
The long-gestating Sprint and T-Mobile merger is not happening after all despite reports that the two carrier giants are close to sealing the deal.
The companies announced in a joint statement that they have ended their negotiations about their big team-up after failing to agree on the terms. T-Mobile President and CEO John Legere had this to say:
The prospect of combining with Sprint has been compelling for a variety of reasons. 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.
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Sprint President and CEO Marcelo Claure, on the other hand, said in the same statement that they are better off by themselves despite the advantages of becoming one with the third biggest carrier in the country:
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.
Just last month, there were reports that Sprint and T-Mobile were almost ready to make the announcement of the merger but the more recent buzz suggested that the discussions had died down.
According to Reuters, becoming one massive carrier would have allowed both companies to net more than 130 million subscribers, closing in on their biggest rivals — Verizon and AT&T. However, not all hope is lost.
The publication believes that the fact that Sprint and T-Mobile came out with a joint statement, which is not usual for these cases, suggest that they are making efforts to maintain a relationship that could result to them reopening talks about the possibility.
For University of Michigan Ross School of Business professor Erik Gordon, at the end of the day, the consumers are the big winners in this foiled merger:
Consumers are better off without the merger because Sprint and T-Mobile will continue to compete fiercely for budget-conscious customers.
