Reports of the Sprint T-Mobile merger have been coming in for the last few months now and yet no official bid has been submitted by the Softbank-owned third largest carrier in the U.S. Deutsche Telekom also has a say in this matter as it owns a controlling stake, 67 percent to be precise, of T-Mobile USA. Comments from DT top brass make it seem like they’re open to a merger and if a report from Japan’s Kyodo news agency is to be believed, Deutsche Telekom may already have approved Softbank’s plan to buy T-Mobile.
The report claims that Softbank Chairman Masayoshi Son proposed the deal in a meeting with Deutsche Telekom and T-Mobile top executives earlier this month and got an approval. Essentially what this means is that they won’t reject a bid if its submitted. Obviously the outcome of that deal hinges on approval from federal regulators.
There have already been countless reports about federal regulators not warming up to the idea of only three major U.S. carriers as there are concerns relating to the state of competition in the market. Other concerns include risk of prices rising for consumers.
Moreover there’s precedent. A few years back regulators blocked the $39 billion takeover bid for T-Mobile by AT&T. It ended up costing the latter which had to give T-Mobile spectrum and cash as a result of the deal falling through. This allowed the carrier to re-emerge on the scene as a fierce competitor.
Still there’s no indication of when a formal buyout bid for T-Mobile USA is going to be submitted. We’ll just have to wait and see if and when that happens.