Sprint and SoftBank End Pursuit of T-Mobile Merger
Sprint and its corporate parent, the Japanese telecommunications giant SoftBank, have decided to drop their pursuit of T-Mobile US after conceding that antitrust regulators would block a deal in an industry that is dominated by just a few large players, a person briefed on the matter said on Tuesday.
The decision, made at a Sprint board meeting on Tuesday afternoon, is the second failed effort by large American wireless carriers to merge in three years. And it represents a serious blow by SoftBank to develop a big new challenger to the two giants of the American cellphone industry, Verizon and AT&T.
The end of the deal leaves open the question of what paths Sprint and T-Mobile will forge as smaller competitors to the enormous titans of their industry. Combined, the two control less than a third of the United States’ wireless market.
Shares in T-Mobile fell nearly 9 percent in after-hours trading on Tuesday, while Sprint’s shares tumbled 15 percent after the markets had closed.
In recent years, T-Mobile has shaken up the industry with an array of novel pricing plans, gaining admirers among both analysts and investors, but Sprint has lost customers for several quarters as it struggles to upgrade its network.
“They have a lot of wood to chop,” Craig Moffett, a research analyst at MoffettNathanson, said of Sprint. “They will have to spend a fortune to fix their network, and they will very likely have to cut prices to stay competitive at the same time.”
Sprint is planning at least one major change in the near term. On Wednesday morning, the company is expected to announce that it will replace its current chief executive, Daniel Hesse, with Marcelo Claure, the person briefed on the matter said.
Mr. Claure is the founder of Brightstar, a wireless services company that sold a majority stake in itself to SoftBank last year. He joined Sprint’s board in January.....
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