Softbank is prepared to let T-Mobile and Deutsche Telekom retain control of a merged Sprint T-Mobile if a deal gets done, Reuters reports. Sprint's Japanese owner Softbank attempted a Sprint T-Mobile merger in 2014, but the deal was blocked by regulators who feared it would only reduce overall competition in the space. But Softbank Chair Masayoshi Son has been determined to get the deal done ever since, and has been working overtime to sell the Trump administration and Deutsche Telekom on a new deal.
But it's not clear Deutsche Telekom is still willing to sell. And if they are, it will be at a steep premium from the last effort, given T-Mobile's ongoing success.
SoftBank has been prevented from approaching Deutsche Telekom so far because FCC collusion rules prohibit their communications during a spectrum auction. But with the FCC expected to finalize auction winners shortly, Softbank is polishing up its sales pitch. Comcast and Charter are also consistently mentioned as possible suitors, which could drive up the cost of T-Mobile even further.
T-Mobile CEO John Legere acknowledged the likelihood of such a deal during an earnings conference call with the media and analysts this week.
"Sprint is clearly playing the game for the next quarter, in that they've got good spectrum, but they don't have a franchise. They're a candidate for being a part of a greater organization, either through scale, or something else," Legere said. "There certainly is an expectation and an air of less regulation... corporate tax reductions, less impediment to... innovation," said the CEO.
Given Sprint's consistent failure at crafting a brand identity that truly resonates with consumers, T-Mobile leadership of the merged company would certainly be the more sensible route if a deal gets done. Theoretically, the combined company would be better positioned than ever to do battle with AT&T and Verizon. But historically, consolidation in telecom creates less overall competition and therefore less innovation, not more (cable's abysmal customer service being exhibit A). That's on top of the job losses that result as redundant positions are eliminated.
As this week's battle over unlimited data has shown, T-Mobile's competitive impact has been indisputable. But history has proven repeatedly there's simply no guarantee the "uncarrier's" consumer-friendly behavior persists in the wake of consolidation and less competition.