Report: Sprint Close to Purchasing T-Mobile US, Deal to be Announced in July
June 4, 2014 7:35 PM
comment(s) - last by
Bloomberg says the deal will be valued at $40/share
Just when T-Mobile is knee-deep in forcing the wireless industry leaders (namely
copycat nearly every initiative that it implements
, we’re hearing word that third-place Sprint is
inching even closer to acquiring the company
. A new report from
states that Sprint Corp. has nearly come to a decision on the final purchase price for T-Mobile US, and is zeroing on a valuation of $40/share.
The deal will reportedly comprise of 50 percent stock and 50 percent cash, while parent company Deutsche Telekom AG will retain a 15 percent stake in marriage.
acquired Sprint last year for $21.6 billion
(it holds an 80 percent stake in the company), and this upcoming Sprint deal is reportedly valued at around $41 billion. It was reported in late April that Softbank approached Goldman Sachs Group Inc., Citigroup Inc., JPMorgan Chase & Comp., Mizuho Financial Group Inc., Bank of America Corp., and Deutsche Bank to secure financing for the acquisition.
T-Mobile CEO John Legere, seen here in the black leather jacket. [Image Source: T-Mobile USA]
, the merger will be officially announced next month.
One of the big decisions that has yet to be made is who will lead the combined company, but we’re hoping that T-Mobile’s animated
CEO John Legere
gets the nod.
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RE: How does the merger work?
6/5/2014 2:10:38 PM
Sprint is actually pretty good in certain cities and decent in rural areas. They have roaming agreements with Verizon and most of their plans include free roaming, so if you're in an area without Sprint coverage you'll just roam on Verizon's network. (Their sensitivity for roaming is way too low though - the phone won't switch to roaming if there's a completely unusable 0-bar Sprint signal. You can "fix" this if you're rooted with an app which lets you manually force roaming.)
Their problem is that when they were first building out their digital network, they contracted with a lot of cheap bidders to build their tower network in many cities. In order to save money, these bidders then spaced the towers as far apart as the communications gear specs said you could put them. The towers perform to spec only in ideal cases, and so Sprint ended up with a bunch of towers which were spaced too far apart for practical use.
Unfortunately once a tower is built, you can't just pick it up and move it. You have to fill the coverage holes in between with a new tower. The net result being your towers are now
than they would've been if you had spaced them right in the first place, and it's cost you more than if you'd paid a little extra initially. It also causes greater interference since the neighboring towers are closer than they need to be to the tower your phone is transmitting with. Sprint has been in denial over this, and been trying to fix things while building as few additional towers as possible. A lot of their past actions (e.g. selling off parts of their tower network and immediately leasing it back) revolve around this central problem.
If they really want to fix this, they need to re-allocate their tower spacing in the cities where they have poor coverage. A merger with T-Mobile just might make this possible. They can sift through their and T-Mobile's towers and come up with better tower spacing, move their CDMA and T-Mobile's GSM comms gear to those towers, and sell off the towers they don't need anymore.
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