Sprint and T-Mobile may not end up together after all — at least not in the immediate future. According to Nikkei, Sprint’s owner, Softbank, plans to call off merger negotiations with T-Mobile because the two companies can’t agree on what ownership of the combined business would look like. The two companies have been in talks for months, and Softbank had hoped to combine the two companies as early as 2013.
Since T-Mobile has over 10 million more US phone subscribers than Sprint, it had been widely assumed that the combined company would primarily be owned by Deutsche Telekom, T-Mobile’s parent company. It sounded like Softbank was fine with that, but according to Nikkei, it’s not. Softbank’s board reportedly voted on Friday not to give up control of the combined company and therefore to call off merger negotiations.
THERE MAY NEVER BE AN END TO THESE TALKS
It’s entirely possible this won’t be the absolute end of the Sprint–T-Mobile talks. Softbank may be hoping today’s news will get Deutsche Telekom to reconsider — and Nikkei says Softbank will only “propose ending the negotiations,” which seems to leave open some room for them to continue, should the terms change. Or, Softbank could be hoping to revisit a potential merger should the carrier market change in a favorable way down the road.
Softbank has been pushing this merger for years, and T-Mobile has always seemed interested as well. It would quickly rocket the combined company onto the same footing as AT&T and Verizon, putting it in a close third place, instead of the distant third and fourth place roles they currently hold. It would reshape the US wireless industry in a major way, transforming one of the scrappy medium-sized players into a behemoth that doesn’t have nearly as much to compete for.