SoftBank's T-Mobile acquisition deal expected in spring

SoftBank's T-Mobile acquisition expected in spring

SoftBank, the Japanese owner of third-ranked U.S. wireless carrier Sprint, plans to make an offer for T-Mobile in spring. The two businesses would likely be integrated with Sprint, according to Nikkei.

Rumors of the takeover plan first started circulating earlier this month. SoftBank CEO Masayoshi Son has aggressive plans for the American wireless market; his SoftBank spent more than $20 billion to acquire Sprint in a deal that was closed earlier this year. T-Mobile is the fourth-ranked US wireless carrier; both T-Mobile and Sprint have been in a race to build out 4G LTE networks to keep pace with larger rivals Verizon and AT&T.

Nikkei reports that Deutsche Telekom, T-Mobile US's parent company, is pushing SoftBank to offer cash and other transactions to what was initially envisioned by SoftBank as a stock swap.

Even if SoftBank and Deutsche Telekom put together a deal that works for both parties in principle, it's still subject to regulatory approval. It was only two years ago that the U.S. Federal Communications Commission (FCC) and Department of Justice (DOJ) put the brakes on a merger between T-Mobile and AT&T, citing reduced competition as detrimental to U.S. consumers.

Both Sprint and T-Mobile are far behind their larger rivals when it comes to network buildout and, more importantly, subscriber base - and even the two smaller competitors combined would still fall short of AT&T's subscriber base. So it's entirely possible that the DOJ and FCC might view a merger of the two smaller companies in a different light than the AT&T deal.

For SoftBank, it's all about economy of scale and control of spectrum - adding another 45 million customers gives the company more muscle when negotiating deals with cell phone manufacturers.

Nikkei

Peter Cohen

Managing Editor of iMore, Mac and gaming specialist and all-around technologist. Follow him on Twitter @flargh

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Reader comments

SoftBank's T-Mobile acquisition deal expected in spring

9 Comments

I'm very against any current prospects .. Both Sprint/Softbank and Dish.. In either case, John would be out, likely... and so would Uncarrier plans and strategy.. We'd likely see a return to contracts and higher pricing..

This is my fear as well. There's still a chance the FCC will view a merger as detrimental to the public interest, and when the question is opened for public comment people should write to them and explain why it's a bad idea.

Acquisitions, mergers, takeovers: Great for companies' bottom-lines and stock-holders; awful for customers. Blah.

There's still too much up in the air for me to get all hot & bothered over this... Yet.

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Been with T-Mobile for a very long time along with other Carriers. I have the fastest HSPA+ speeds along with lightning fast LTE. T-Mobile has also refarmed the towers in my area. My unlocked T-Mobile 5S gets very fast AT&T speeds as well. T-Mobile in my area is the fastest and most reliable Carrier, it blows Verizon and AT&T away and Sprint isn't even on the radar. I hope they can continue as they are without bringing on any partners. Their real unlimited data plans along with tethering is unbeatable. If you are in a T-Mobile area and they are increasing their real estate very fast you are crazy not to give them a try. You might just be pleasantly surprised.

I think it would be interesting. It would boost spectrum for both, and possibly give the new company a chance that presently does not exist, to come in striking distance of being able to compete with the big two. As for the loss of no contract, nope this is the way the industry is heading. It is cheaper for them than to continue to subsidize phones.

The new year is gearing up to be very interesting regarding wireless carrier. I like it when we have more than 3 choices. This helps keep the price low between these carriers.

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If this comes to pass, it could be either great for consumers or a disaster. If they combine LTE networks, move customers to T-Mobile's GSM-based network (with added 1900mhz spectrum), and have John Legere and his people in control, this could change the US market in a hurry. If its Dan Hesse's Sprint taking over and just gobbling up TM USA, any Uncarrier gains will most likely have been lost.