Sprint Reportedly Talking To White House About Possible Merger With Comcast Or T-Mobile

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In recent weeks, President Trump has repeatedly mentioned promised investments and jobs from Sprint and its parent company Softbank. Now the wireless provider is reportedly hoping to eventually turn that goodwill — and the Trump administration’s light-touch approach to regulation — into a mega merger, possibly with T-Mobile, Comcast, or others.

New wireless industry mergers are currently on hold until the government-sponsored wireless spectrum auction ends later this spring, but the New York Times reports that Tokyo-based SoftBank has met with members of the White House economics team, talking up the need for consolidation.

SoftBank executives and members of President Trump’s economic team recently addressed the future of mergers broadly. The Times, citing sources briefed on the matter, reports that the presentations claimed that a lack of advanced digital investments has put the U.S. economy at risk. This risk could be mitigated if telecommunications and wireless companies merged.

 

Sources tell the Times there are several options for the company, including linking up with competitor T-Mobile, or hopping into the fray with Comcast.

SoftBank declined to provide the Times with comment on the matter.

Seeking a courtship with T-Mobile would likely give consumers and regulators a sense of deja vu: Sprint tried its best to draw in its wireless competitor back in 2014 — and never gave up the dream, apparently.

SoftBank insisted that a merger between Sprint and T-Mobile was necessary for either of the companies to survive and compete longterm. However, early talks among regulators and the Federal Communications Commission showed that any type of marriage would not get the green light right away.

Eventually, Sprint’s board pulled the plug on its pursuit of T-Mobile, also ending the seven-year term of CEO Dan Hesse.

Concerns about a merger between Sprint and T-Mobile would likely be the same: if the two combined it would leave Americans with only three major national carriers. However, in recent years, T-Mobile has been gaining on the competition.

Despite this, both T-Mobile and Sprint have been left behind as Verizon and AT&T have diversified their portfolios with acquisitions of Yahoo! and DirecTV, respectively.

But resisting mergers has also helped the wireless economy. After regulators shot down a merger between AT&T and T-Mobile, analysts tell the Times competition has improved. Most recently, the four wireless carriers have launched and then revamped unlimited data plans in order to squirrel away customers from each other.

“Five years ago, Sprint and T-Mobile were irrelevant. Now we are seeing them drive down prices. Why would you want to change that?” Philip Cusick, a telecommunications expert with JPMorgan Chase tells the Times.

Other tie-up options, could include Sprint joining forces with Comcast. If this were to transpire, it would fulfill T-Mobile CEO John Legere’s prophecy that cable and wireless provider mergers were inevitable.

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