Sprint and T-Mobile’s Foreign Owners Prepare to Make a Deal
SoftBank (SFTBY.PK) is reportedly moving forward with its plans to purchase T-Mobile US (NYSE:TMUS) through Sprint (NYSE:S), and T-Mobile’s majority shareholder, Deutsche Telekom, seems to be readying itself to cut a deal with SoftBank for its stake in T-Mobile. According to a regulatory filing seen by Re/code, the German company has moved its U.S. holdings from Germany to the Netherlands, which has more favorable tax laws regarding the sale of assets.
While some have questioned whether U.S. regulators will allow such a deal to go through, SoftBank and Deutsche Telekom seem to be preparing themselves to try for a combination of the third- and fourth-largest wireless carriers in the United States. Regulators blocked a bid AT&T made to buy T-Mobile in 2011, saying they wanted the industry to continue to have four different major competitors. AT&T CEO Randall Stephenson has said he doesn’t believe that the Federal Communications Commission or the U.S. Department of Justice will allow further consolidation in the U.S. wireless industry.
The American wireless industry has been criticized as a duopoly between Verizon Communications (NYSE:VZ) and AT&T (NYSE:T). Since Sprint and T-Mobile both fall far behind Verizon and AT&T in terms of subscribers, SoftBank may be able to successfully argue that allowing the combination would create a stronger competitor to the top two providers.