Sprint Apparently Tosses In the Towel On T-Mobile

August 6th, 2014 by · 4 Comments

According to the Wall Street Journal and Bloomberg this morning, Sprint has given up its quest to purchase its rival T-Mobile US — again. Of course, it’s not an official decision and even if true they could restart things in a heartbeat if they wanted to, but the WSJ has had the inside track on this since the beginning.

The issue has never been about how to successfully woo T-Mobile, but rather how to get regulators to if not approve then perhaps just look the other way. But while the FCC’s recent indication it wouldn’t even allow the two companies to make a joint bid in the pursuit of spectrum was a blow, I think it was Iliad and its billionaire protagonist Xavier Niel that killed the idea.

Iliad’s surprise bid for T-Mobile US knocked out the main pillar underneath the case to allow Sprint to buy them. Regulators like 4 and not 3, and Sprint’s main argument was that 4 is not viable in the long term. Iliad’s bid, however, says that at least part of the industry thinks it is and is willing to invest in #4 despite the scale problems.  That boosts the position of regulators substantially, and Sprint was already having trouble convincing them.

The question now is whether Iliad will have a followup bid for T-Mobile US. DT was not impressed with the first one, but that was with Sprint in the picture. Now that Masayoshi Son is apparently taking is ball and going home, the yardstick that was being used to call Xavier Niel’s bid inferior is no longer handy.

Sprint’s CEO Hesse may be out now too they say, though I’m not sure any of this is his fault.  [Update: Marcelo Claure has been named Sprint’s new CEO. ]  T-Mobile’s ‘uncarrier’ campaign has certainly shaken things up this past year, and not just in terms of subscriber momentum.

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Categories: Mergers and Acquisitions · Wireless

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4 Comments So Far

  • Anonymous says:

    seems to be a mess, where does Sprint go from here ? DIsh still around maybe lookig for a partner

  • Grant Lewis says:

    Anyone think DISH CEO might be interested in T-mobile? After all its not like we haven’t seen this before – only in reverse with ATT purchasing Directv … one of the advantages is “”Customers will be able to get wireless, voice, data, TV and home security from the same company nationwide”. I know there are challenges with spectrum … but putting that aside …. would be interesting.

    • Guest says:

      Dish is probably interested in T-Mobile but they don’t have the capital to make a compelling bid nor the financing options. If they did have 30 plus billion to spend I’m pretty sure they wouldn’t have backed out of trying to purchase Directv like they did…

  • mhammett says:

    The only thing Sprint needs is a first right of refusal on roaming partners and time.

    T-Mobile needs 600 MHz and Dish’s spectrum. Perhaps they need Dish *and* Illiad.

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