T-Mobile in new talks to acquire Sprint

SAN FRANCISCO: T-Mobile US Inc is engaged in a new round of talks to acquire Sprint Corp, a person familiar with the matter said on Tuesday, the latest effort to bring together the third and fourth largest U.S. wireless carriers.

The combined company would have more than 127 million customers and could create more formidable competition for the No. 1 and No. 2 wireless players, Verizon Communications Inc and AT&T Inc, amid a race to expand offerings in 5G, the next generation of wireless technology.

T-Mobile´s and Sprint´s previous round of negotiations ended in November over valuation disagreements.

Since then, Sprint´s shares have lost more than a fifth of their value amid questions about how the company can compete effectively under the weight of its long-term debt of more than $32 billion.

The source asked not to be identified because the matter is confidential. Sprint declined to comment, while T-Mobile did not immediately respond to requests for comment.

Shares of Sprint, controlled by Japan´s SoftBank Group Corp , closed off their intraday high but still up more than 17 percent at $6.02, giving the company a market capitalization of $25 billion.

The Wall Street Journal first reported on the new talks. Shares of T-Mobile, majority-owned by Germany´s Deutsche Telekom AG, gained 5.67 percent to $63.13, giving it a market capitalization of $54 billion.

Failure to clinch an agreement last November left SoftBank Chief Executive Officer Masayoshi Son, a dealmaker who raised close to $100 billion for his Vision Fund to invest in technology companies, in search of other options for Sprint.

"SoftBank has to change the way they approach this," Recon Analytics analyst Roger Entner said.

"Unless they have changed their minds, (and admitted) that they are indeed the junior partner, nothing has changed.

"Even though Sprint´s customer base has expanded under CEO Marcelo Claure, growth has been driven by heavy discounting.