Sprint reportedly unsure about a T-Mobile buyout after FCC meeting

February 10, 2014
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It seems Sprint and T-Mobile’s proposed merger might be on hold, if not dead in the water. The Wall Street Journal is reporting that Sprint has cooled their heels on an aggressive buyout of T-Mobile, but it has little to do with the asking price. It has everything to do with regulatory bodies, though.


While Sprint was lining up a staggering $45 billion or so for little Magenta, they were also meeting with the various regulatory offices who could squash such a merger. The FCC and DOJ are notoriously wary of such forces combining, as was the case when AT&T tried to buy T-Mobile a few years back. The lead attorney for the DOJ is on record as boasting the benefits of having T-Mobile around as-is, too.

The buyout attempt by AT&T led to fees for the failed transaction, which T-Mobile has used to their advantage of late. It’s also the type of thing Softbank (and by virtue, Sprint) wants to avoid. Fees on top of missing out on the merger would just be insult to injury for Softbank, who is leveraging the farm on this one.

It looks like after meeting with the DOJ and FCC a few weeks ago, Softbank is no longer feeling so confident. We’re not surprised, either. Between the lack of necessity in the buyout/merger, and the FCC’s reluctance to have three major carriers, this plan just doesn’t hold a lot of water. The reasoning is good, but the execution is likely not going to pass the FCC gauntlet.

Source: The Wall Street Journal


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