The long-rumored merger between T-Mobile and Sprint, the nation’s third and fourth largest wireless carriers, is falling apart, according to news reports.
Nikkei reported that a disagreement over ownership of a combined T-Mobile-Sprint entity has proven a sticking point in the deal, and Sprint parent company SoftBank is preparing to pull out of negotiations with T-Mobile owner Deutsche Telekom as soon as tomorrow. Nikkei and Wall Street Journal report that Deutsche Telekom wants a controlling stake in the combined company, and SoftBank balked, spelling the beginning of the end of the deal.
T-Mobile and Sprint did not respond to requests for comment.
T-Mobile and Sprint have been talking about a merger for several years. SoftBank nearly acquired T-Mobile in 2014 but the deal fell through after U.S. officials expressed concerns.
Any acquisition talks in the wireless industry were put on hold for the better part of a year as the Federal Communications Commission held a spectrum auction. That process ended in April and T-Mobile spent close to $ 8 billion to buy up huge chunks of low-band spectrum meant to shore up signal strength within buildings and in rural areas.
Since the initial round of talks, T-Mobile has surged under CEO John Legere, passing Sprint to become the third largest wireless carrier in 2015. Legere and Sprint CEO Marcelo Claure have developed a rivalry, with the two chief executives lobbing insults back and forth over the years as the companies jockeyed to be the main challenger to AT&T and Verizon.