SoftBank ups stake in Sprint after T-Mobile merger called off
T-Mobile and Sprint have called off merger talks with the companies ‘unable to find mutually agreeable terms’, according to both firms.
Both sides, in statements issued over the weekend, gave the impression of being better off without each other. T-Mobile said it was ‘clear all along’ that a deal would have to improve on the company’s already ‘outstanding’ performance, while Sprint argued its ‘significant assets’ would mean it would be best to ‘move forward’ on their own.
“While we couldn’t reach an agreement to combine our companies, we certainly recognise the benefits of scale through a potential combination,” said Marcelo Claure, Sprint president and CEO in a statement. “However, we have agreed that it is best to move forward on our own. We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth.
“As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries,” Claure added. “We are determined to continue our efforts to change the wireless industry and compete fiercely. We look forward to continuing to take the fight to the duopoly and newly emerging competitors.”
T-Mobile saw it slightly differently. “The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders. However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding standalone performance and track record,” said John Legere, president and CEO of T-Mobile US in a statement.
“Going forward, T-Mobile will continue disrupting this industry and bringing our proven Un-carrier strategy to more customers and new categories – ultimately redefining the mobile Internet as we know it,” Legere added.
The merger move has been mooted since as far back as 2013, with the original bid being dropped in August 2014 due to ‘regulatory resistance’, according to a Reuters report at the time. Back then Sprint was firmly the number three US wireless carrier and T-Mobile number four.
Since then, the roles have reversed. According to Statista’s figures, T-Mobile now holds 16.88% market share as of Q217, ahead of Sprint on 12.8%, behind Verizon (35.74%) and AT&T (33.13%). For Q312, when John Legere was named CEO of T-Mobile, the figures were at 10% and 17% for T-Mobile and Sprint respectively.
In its most recent financial results, T-Mobile recorded more than one million net additions for the 18th consecutive quarter, while Sprint it had the highest share of post-paid phone gross additions in the company’s history.
A day after the move was called off, SoftBank, the owner of Sprint, announced it would increase its stake in the operator, though not buy the whole company. Masayoshi Son, chairman and CEO of SoftBank Group and chairman of Sprint, said Sprint was a ‘critical part’ of the company’s plan to deliver ubiquitous connectivity to American consumers.