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Report: DT Sells T-Mobile to SoftBank/Sprint

Daily Insight | Rich Karpinski | May 30, 2014

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It could be all over but for a few details. According to a report from Japanese news site Kyodo, Deutsche Telekom (DT) and Japan’s SoftBank have reached an agreement to sell DT’s T-Mobile USA unit to SoftBank/Sprint.
 
Reuters reports DT is willing to keep a minority stake in T-Mobile to seal the deal, although other details around price and financing still need to be hammered out. DT currently owns 67 percent of T-Mobile, while SoftBank is the majority owner of Sprint. Even after the financial details are smoothed out, the deal will face regulatory scrutiny in the U.S. since it would bring the number of major operators down to three from four. Both DT and Sprint declined to comment.
 
Yankee Group Principal Analyst Rich Karpinski comments
 
“This is an interesting, seemingly real-world development versus the usual rumors. We all know Sprint/SoftBank wants a T-Mobile deal. Negotiating terms with DT actually moves it forward, and DT keeping a stake is a smart move, too, as the combined operator could use all the global ecosystem support it can get. Meanwhile, SoftBank Chairman Masayoshi Son was on a U.S. stage again this week at the Code conference saying all the usual things: U.S. broadband speeds are too slow; telecom infrastructure is the key to national competitiveness; AT&T and Verizon are a money-printing duopoly; Sprint and T-Mobile are too small to compete alone. He also said he would abide by the concept of Net neutrality, likely giving the FCC a solid trade-off condition it can put on approval of a Sprint/T-Mobile merger. Stay tuned on that front—and for a press release announcing the proposed merger coming as rumored sometime this summer as this deal seems to be moving solidly forward.”
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