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Sprint gives up on T-Mobile

by on06 August 2014



Watchdogs scared it away

Sprint has given up trying to buy T-Mobile US after the regulators more or less told it to go forth and multiply. 

Sprint's Japanese parent SoftBank saw the acquisition as key to taking on U.S. market leaders AT&T and Verizon Communications. Sprint and T-Mobile have not ruled out consolidation in the future but concluded that a deal is unlikely to be approved at this time, the sources said. US regulators have insisted that they want to keep the number of major wireless carriers at four.

The Japanese were surprised, as they had been told that the US regulators, who are often former employees of the telcos, did whatever they were told.

"We didn't think the opposition would be this strong," said a SoftBank executive but added: "The environment will definitely change.”

It looks like there will be a rival bid for T-Mobile by French telecoms firm Iliad made a lower bid than Sprint but is in talks with U.S. cable and satellite companies to sweeten its offer. Sprint will appoint a new CEO, Marcelo Claure, founder of mobile phone distributor Brightstar which was acquired by SoftBank last year.

Dan Hesse who has been CEO of Sprint since 2007 has not been that popular anyway. He overhauled Sprint's network infrastructure in such a way which caused a loss of reliability and the company to lose subscribers so the loss of the T-Mobile deal was one cock-up too many.

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