More news today in the saga of Sprint and T-Mobile possibly merging as new information indicates at least a couple banks have provided proposals to Sprint that show how such a deal could work. The estimates put the complete deal in the $50 billion range composed of two parts, about $31 billion for the actual acquisition of T-Mobile and another pot of money totalling about $20 billion to refinance existing T-Mobile debt. T-Mobile's current market value is about $26 billion and rising based on reports of a possible merger.
While the financial analysis completes an important step for Sprint, there are still several issues that would need to be resolved. One of those is the regulatory approval such a deal would require, especially from U.S. antitrust authorities who may not look favorably on the market for major U.S. carriers being reduced from four to three. Another issue will be the roles of the carriers' majority investors SoftBank Corp. of Japan and Deutsche Telekom AG of Germany as well as what the roles of Sprint and T-Mobile will be. Even something as basic as deciding which entity will be rolled into the other needs to be addressed.
Another issue for the two entities is time. Given the size of the deal and the expected regulatory reviews, final approval could take more than the typical 9 months banks are used to committing to when funding something like this. The parties are also up against an expected mid-2015 government auction of wireless airwaves. A possible merger is already within the 12-18 month window needed to complete such a deal prior to the auction taking place.
For now, management of both companies continue their work on trying to turn around their companies with varying success. Sprint continues to lose customers while T-Mobile's Uncarrier strategy seems to have helped it turn the corner.
source: Wall Street Journal
This wouldn’t really work in any functional way unless they convert equipment and other stuff and rely on t-mobiles already built up network to do it… Sprint just doesn’t have the overall clout or experience to really get this going in a meaningful way at all and it is puzzling… T-mobile’s coverage is set to improve this year and i’d fear them merging with sprint would cause their coverage to be lacking further than it is and their prices to go up when they do not need to
I’ve used AT&T (broke contract with 3 phones to get away), Metro PCS (great but didn’t have the phone I wanted), Sprint (left the day my contract was up) and now am with T Mobile. T mobile has been great in every way. I fear this deal would just bring Sprints serious dysfunction to T-mo and ruin the only good carrier I’ve found.
Merging two duds will only create a single dud in the market place.