The worst kept secret in merger romances is apparently getting achingly close to becoming a reality, with a new report claiming that the parents of T-Mobile and Sprint are putting the final details together on an arranged marriage that would see these two kids wed before Halloween.
This is according to Bloomberg Terminal, which notes that both Sprint’s parent company — Japan-based Softbank — and T-Mobile’s folks at Deutsche Telekom are in the process of doing their due diligence, with the apparent goal of finalizing a merger agreement this month.
That would allow both companies to announce the merger when they reveal their latest quarterly earnings. Neither has set a definite date for when they will discuss these financial results, but in recent years T-Mobile has been announcing its third quarter earnings during the last week of October. Last year, Sprint also released its quarterlies during that same week, but the company has more frequently waited until the first week of November.
Bloomberg notes there are still some issues to be ironed out, like where the merged company would be headquartered and who would make up the executive team.
Deutsche Telekom has been trying to unload its T-Mobile U.S. business for years, coming close in 2011. That’s when it reached a deal to sell T-Mobile to AT&T. However, that sale fell apart when both the FCC and Justice Department antitrust reviewers moved to block the merger over concerns that it would result in too much consolidation in the wireless market.
Softbank also tried to engineer a Sprint marriage to T-Mobile in 2014, but without ever reaching an agreement after realizing it too faced likely doom at the hands of federal regulators.
My how things have changed since then. While a SprinT-Mobile will certainly draw a lot of fire from consumer advocates and opponents of industry consolidation, it is hard to imagine the current administration attempting to block this merger. FCC Chair Ajit Pai, a former Verizon attorney and a pro-industry stalwart, has previously indicated his reluctance to use the commission’s authority to consider a the public interest merit of a merger.
Pai’s FCC also recently broke with the commission’s previous findings and determined that there is robust competition in the U.S. wireless market, even though there are only four national networks and two of those — AT&T and Verizon — control the large majority of the market.
The Chair was heavily criticized by his fellow Commissioner Mignon Clyburn, who took Pai and his fellow GOP commissioners to task for what she saw as a “truncated analysis” with a “myopic view” of wireless competition.
“This is like a doctor looking at one organ and pronouncing a patient fit as a fiddle,” said Clyburn about the report.