After British telecom major Vodafone exited the American mobile market in a $130 billion deal with Verizon Wireless, Deutsche Telekom is gearing up to give up its control over T-Mobile US to rival Sprint.
Bloomberg reports that the deal size is likely to be around $45 billion. But talks for a possible acquisition are in initial stages.
Sprint wants T-Mobile in its fold to strongly compete with Verizon Wireless and AT&T. The recent mobile tariff war in the American telecom market indicates that the phone carriers are heading for price correction benefitting wireless data subscribers.
The report says SoftBank’s billionaire founder Masayoshi Son and Sprint Chief Executive Officer Dan Hesse plan to decide in the next few weeks whether to move ahead on a bid for T-Mobile US after speaking with U.S. regulators.
Son will also meet with T-Mobile promoter Deutsche Telekom AG (DTE) to relay those conversations so the two companies can determine if they should begin structuring a deal, said the people, who asked not to be identified because the talks are private. Deutsche Telekom asked Son to gauge regulatory sentiment for such a deal.
SoftBank, which holds a controlling stake in Sprint, is attempting to convince the U.S. government that merging the No. 3 and No. 4 wireless carriers will increase competition and improve prices and options against Verizon Wireless and AT&T.
Of the 225.2 million monthly subscribers at the four top carriers in the U.S., more than 75 percent are customers of AT&T and Verizon. This will be one of the arguments of Sprint to convince the U.S. regulators, who are yet to dismiss the merger move.
Bellevue, Washington-based T-Mobile had the second-highest subscriber gains last year, adding 2.1 million in the three quarters since it completed its acquisition of MetroPCS Communications against 4.1 million at Verizon and 1.8 million at AT&T.
Sprint, which is expected to report next week that its fourth-quarter net loss widened to $1.3 billion, shed 2.1 million subscribers last year.
The main purpose of Vodafone’s exit from America was to unlock the shareholder value and re-invest in emerging technologies and emerging telecom markets.
