The stock prices of T-Mobile and Sprint soared Tuesday following a Wall Street Journal report that the nation’s third and fourth largest wireless carriers have rekindled merger talks.
The Journal citing unnamed people familiar with the matter said the talks are preliminary.
In early November, the two companies ended on-again off-again merger talks over their inability to arrive at mutually agreeable terms.
In a statement issued at the time, T-Mobile CEO John Legere indicated that “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.”
A possible union could be attractive to both T-Mobile and Sprint because of the scale and potential for cost-cutting such a combination would bring, allowing the bigger company to increase investments in next-generation 5G networks, and better compete against their much larger rivals Verizon and AT&T.
In the fall, Craig Moffett, partner and senior analyst at research firm MoffettNathanson wrote that the combined companies could save as much as $4 billion annually.
Any pairing would also have widespread consumer implications.
Over the last couple of years, mobile pricing wars were stoked in large measure by T-Mobile and Sprint, especially the spread of “unlimited” data plans, and other goodies that competition brought consumers. T-Mobile, for example, offers customers a free Netflix subscription under some plans.
But critics of any such deal fret that a post-merger environment could temper if not eliminate such practices and possibly result in higher prices for all wireless customers.
Even if the renewed talks bear fruit, of course, U.S. regulators must bless the merger.
Sourced:- T-mobile-sprint In Merger Talk Again? What A Link-up Would .., https://www.usatoday.com/story/tech/2018/04/10/t-mobile-sprint-reportedly-renew- (accessed April 11, 2018).