Published: Wed, April 11, 2018
Markets | By Erika Turner

Sprint, T-Mobile restore merger talks

Sprint, T-Mobile restore merger talks

Just five months after T-Mobile US Inc (NASDAQ: TMUS) and Sprint Corp (NYSE: S) abandoned merger talks, the two are back at the table in preliminary discussions, according to the Wall Street Journal. The two companies are reportedly in merger talks.

Shares of Sprint and T-Mobile were up over 6 percent following the news, as Wall Street analysts have always been a fan of a merger between the two companies.

According to a Tuesday report, the US carriers are having "preliminary" talks to merge. T-Mobile didn't immediately respond to emails seeking comment.

T-Mobile CEO John Legere. A combined T-Mobile-Sprint would have approximately 100 million subscribers, which would allow the new firm to leapfrog over AT&T and become the second largest USA carrier after Verizon. Both sides past year supposedly agreed that a combined T-Mobile-Sprint would be majority owned by Deutsche Telekom, and run by T-Mobile's Legere, who has done an fantastic job turning T-Mobile into a well known brand. Japan's SoftBank owns 85% of Sprint; the company's founder and CEO, Masayoshi Son, was reluctant previous year to give up a large chunk of the carrier in any deal with T-Mobile. German telecom giant Deutsche Telekom controls 65% of T-Mobile. Past speculation has been that Deutsche Telekom would become the majority owner, which may not sit well with SoftBank's Son. The company will need to spend as much as $6 billion annually in the next several fiscal years on upgrades, officials said in March.

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Over the last couple of years, mobile pricing wars were stoked in large measure by T-Mobile and Sprint, especially the spread of "unlimited" data plans, and other goodies that competition brought consumers.

But critics of any such deal fret that a post-merger environment could temper if not eliminate such practices and possibly result in higher prices for all wireless customers.

The Department of Justice is now suing AT&T over concerns its $85 billion grab of Time Warner will harm consumers.

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