Spring must finally be here this time, as the aromas of last year’s wireless M&A rumors are once again wafting through the air. Reuters recently reported that Spring and T-Mobile US are talking merger. Yes, yet again.
The two companies last cut off merger talks in November of last year because they disagreed over minor things like price and ownership. DT wants to maintain more than 50% ownership so it can keep consolidating T-Mobile’s results into its earnings, while Softbank and its billionaire protagonist Masayoshi Son objects to taking a minority role. Whether either side’s position has evolved at all is still an open question.
Yet both companies face the need to invest in their network infrastructure for 5G. No matter how messy the integration would likely be, those investments loom very large and ever closer. A merger would make the process more efficient, and thus the financial drivers will keep the two companies coming back to the table until either a deal gets done or gets ruled out forever somehow.
But even if the battle between egos and economics tips towards the latter and a deal gets made, the real wildcard is politics. Three is better than four for the carriers, and four is better than three for consumers, but which is better for Trump? Or might the whole thing get overshadowed and ignored outside of telecom itself in favor of whatever bizarre thing comes up next week.
I’m actually leaning towards the idea that a merger would get less attention than previously. Outside of the industry, who is actually keeping track of the AT&T/TWX saga playing out in the courts right now?
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