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Why the Sprint and T-Mobile Merger Talks Were Called Off

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The T-Mobile-Sprint merger talks

T-Mobile (TMUS) and Sprint (S) issued a joint press release on November 4, 2017, to announce that they had ceased talks about merging because they were unable to find mutually agreeable terms. The merger talks between T-Mobile and Softbank Group (of which Sprint is a subsidiary) have come to a standstill primarily due to a disagreement over the ownership of the combined entity.

Softbank wanted a better valuation and greater control, while T-Mobile’s parent company, Deutsche Telekom, was eyeing a controlling stake after the merger.

The history of the Sprint-T-Mobile merger

This was Sprint’s and T-Mobile’s second attempt to merge after another deal failed to materialize in 2014. In the past, during the Obama administration, Sprint had attempted to merge with T-Mobile, but the regulating authorities noted that they would not entertain such a partnership.

After the denial, both the wireless behemoths took different roads to grow their individual customer base.

However, both Sprint and T-Mobile have a common aim: to come close to the two large telecoms, AT&T (T) and Verizon Communications (VZ). In calendar 3Q17, T-Mobile added 595,000 postpaid phone net customers, while Sprint added 279,000 postpaid phone net customers.

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