T-Mobile USA and Sprint today finally gave a definitive answer about whether they will merge. The telecomm giants said that they have stopped negotiating and will remain independent entities. The wireless carriers "were unable to find mutually agreeable terms" and want to "put an end to the extensive speculation around a transaction," they said in a joint announcement.
Over the past few weeks, numerous merger updates have bubbled up from anonymous sources. Initially, the merger seemed to be a done deal. Merger talks then seemed to break down, only to be revived again a couple days ago.
But none of those rumors were confirmed by the companies' chief executives. That changed today when T-Mobile CEO John Legere and Sprint CEO Marcelo Claure both said that there won't be any deal.
Legere's statement called the prospect of combining with Sprint "compelling for a variety of reasons." But T-Mobile won't pursue a deal that doesn't "result in superior long-term value for T-Mobile's shareholders compared to our outstanding stand-alone performance and track record," he said.
Claure's statement said the following:
While we couldn't reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination. 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.
US likely would have approved merger
T-Mobile is owned by Deutsche Telekom, and Sprint is owned by SoftBank. The decision to call off merger talks came after a meeting involving the heads of all four companies, according to The Wall Street Journal. SoftBank founder and CEO Masayoshi Son reportedly did not want to give up control of Sprint. Earlier reports indicated that Deutsche Telekom would own a majority stake of the combined company if a merger was completed.
Sprint previously abandoned a bid for T-Mobile in 2014 when it became clear that the Obama administration would block the merger in order to preserve the competition created by having four major nationwide carriers. If the companies had struck a deal this year, they would have had a better chance of getting government approval under the Trump administration.
Fighting the Verizon/AT&T duopoly
Because merger talks have been called off, US wireless consumers will continue to benefit from competition among four nationwide carriers as T-Mobile and Sprint challenge market leaders Verizon Wireless and AT&T.
Sprint "look[s] forward to continuing to take the fight to the duopoly and newly emerging competitors," Claure said.
Legere said that T-Mobile has "been out-growing this industry for the last 15 quarters, delivering outstanding value for shareholders, and driving significant change across wireless. We won't stop now."