Mobile, Sprint Abandon Mega-Merger Talks


The other day, Sprint majority owner SoftBank had made a decision to end merger talks with T-Mobile and its majority owner Deutsche Telekomover which side would have majority control of the combined firm. A combined company would have had more than 130 million US subscribers, behind Verizon Communications Inc (N:) and AT&T Inc (NYSE:). However, we have agreed that it is best to move forward on our own. Consumers are cheering the failure of the deal to go through since the result will probably be more price cutting amid the fierce competition in the industry. With its hoard of 2.5GHz high-frequency spectrum, Sprint would have been a flawless fit for T-Mobile and its cache of low-frequency airwaves in the 600MHz-700MHz bands.

Analysts said an end to talks to T-Mobile would leave debt-laden Sprint without the scale needed to invest in its network and to compete in a saturated market. Softbank CEO Masayoshi Son personally approached Charter about a merger, and talks at this point are reported to be strictly exploratory and preliminary in nature, but include a number of higher-ups from both companies.

Sources claim T-Mobile CEO John Legere reached out to Sprint's CEO Marcelo Claure following a T-Mobile board meeting held to decide whether the carrier would attempt to revive the deal. The company has also badgered rivals with its unlimited data plans. Both companies may have to sort that out sooner rather than later.

Reports suggest that a major hurdle to the merger wasn't Sprint or T-Mobile directly, but rather the their ownership.

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It comes as SoftBank said on Thursday it has secured a 2.65 trillion yen ($23.3 billion) senior loan agreement to refinance acquisition loans for Sprint Corp and British chip designer ARM.

The two companies came close to announcing a merger in 2014 but called it off at the last minute due to regulatory concerns.

Sprint and its owner, the Japanese conglomerate SoftBank, have always been looking for a deal as the company has struggled to compete on its own.