A possible merge between Sprint and T-Mobile has officially collapsed, based on a disagreed about which entity would have control over the merged companies.
A new report suggests that the talks broke down over a recent dinner in Tokyo, Japan, at which T-Mobile’s parent company Deutsche Telekom made Sprint parent company SoftBank an offer — and had it shot down.
Neither side will give up control
The issue appears to be that both SoftBank and Deutsche Telekom wanted to be the company in control of the merger, which led to a stalemate situation in which neither would back down.
“[SoftBank chief executive Masayoshi Son] didn’t want to give up control,” said one source, with knowledge of the recent dinner in Tokyo. “He thinks that Sprint is a strategic asset for SoftBank and critical to its future.”
T-Mobile CEO John Legere then followed up by sending a company-wide email, acknowledging that, “There are lots of rumors swirling around – some true and some not.” The email also revealed that, despite talk of a merger, the two companies have now, “ended those discussions.”
“We’re always looking at partnership and growth opportunities to accelerate our business, but any deal we do has to deliver incredible long-term value to our company. That’s no small feat because we have such a bright future on our own as a standalone business. You’ve all worked so hard to put T-Mobile in this position of strength and have the options that we have. It’s incredible! This time around, we could not find an arrangement that meets our high bar – and there’s no need to settle for anything less.”
What this means for the future remains to be seen. As Axios notes in its report: “the end of talks leaves Sprint and T-Mobile both as distant rivals to AT&T and Verizon and potentially in need of a different deal, possibly with a cable company.”