Mobile and Sprint are in active talks about a merger


Sources reportedly close to the situation tell the publication that T-Mobile and Sprint, the nation's third and fourth largest wireless providers, respectively, are actively holding talks regarding a merger. But these sources did stress that negotiators are still weeks away from making any deal final.

Japan's SoftBank Group now owns a majority stake in Sprint, while Deutsche Telekom is the parent company which owns T-Mobile.

Nothing is official just yet, but it appears that this could be an all-stock deal for T-Mobile and Sprint. Low-frequency bands tend to travel farther and penetrate buildings better, which might explain some things if you are a Sprint customer. The carriers' spectrum holdings are complementary-T-Mobile is in the process of expanding its coverage through the 600 MHz airwaves it recently won at auction, while Sprint sits on an enormous pile of 2.5 GHz spectrum that T-Mobile openly covets-and the move would result in three dominant network operators of similar size. As reported, T-Mobile has yet to complete any due diligence on Sprint, and to further complicate the situation, heavy thought must be put into whether antitrust regulators would allow for the #3 and #4 ranked United States carriers to merge.

T-Mobile US Inc (NASDAQ:TMUS) shares added 2.54% to $63.41. Regulators will need to approve this deal, and it's something that both SoftBank and Deutsche Telekom will want to gauge before it makes a deal official. The brokerage firm put the odds of such a deal gaining regulatory approval at 50%-50%.

"Still the synergies are large enough that we continue to believe that at least an attempted merger is a matter of when, not if", MoffettNathanson analysts observed. Both sides are in talks to get the details on paper. Moreover, whether that deal gets approved remains the next question. According to screenshots leaked by Android Central, the carrier would let users suck down 50GB of data through their unlimited plans each month before their speeds are throttled down.

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