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Softbank would cede control of post-merger Sprint-T-Mobile US in order to seal deal

20 Feb 2017

Japan’s Softbank Group Corp is prepared to hand control of Sprint Corp to Deutsche Telekom’s (DT’s) T-Mobile US unit in order to seal a merger between the two US mobile operators Reuters reports, citing people familiar with the matter. The sources told the news agency that SoftBank has not yet approached DT to discuss the projected deal because the US Federal Communications Commission (FCC) has imposed strict anti-collusion rules that ban discussions between rivals during an ongoing auction of airwaves. As such, when the 600MHz Broadcast Television Spectrum Incentive Auction (‘Auction 1002’) formally concludes in April – bidding was completed earlier this month – the two parties are expected to begin formal negotiations. (Note: T-Mobile US is participating in the long-running auction, although Sprint opted to sit out the process.)

Antitrust experts told Reuters that it is difficult to predict how the Trump administration would view a T-Mobile-Sprint merger since key antitrust appointments at the Justice Department have not yet been made. Further, it remains unclear as to how such a combination would be viewed by the FCC, although new chairman Ajit Pai is widely viewed as more business-friendly than his predecessor, Tom Wheeler.

According to TeleGeography’s GlobalComms Database, in June 2014 Sprint unveiled a USD32 billion (USD40 per share) offer for T-Mobile US. The deal, which would have seen T-Mobile US retain a roughly 15% to 20% stake in the combined company, was eventually abandoned by Softbank, after a hostile reception from the US authorities.

United States, Deutsche Telekom (DT), SoftBank Group Corp, Sprint Corporation (became part of T-Mobile US), T-Mobile US

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