NEW YORK: US wireless carrier Sprint has decided to abandon a bid for rival T-Mobile, viewing the massive tie-up as unlikely to win regulatory approval, the Wall Street Journal reported on Tuesday.
Sprint, which is controlled by Japanese giant SoftBank, had been close to a deal valued at some $32bn, according to several reports. The Journal said Sprint gave up after officials from the US Justice Department and Federal Communications Commission indicated they would oppose a deal merging the number three carrier Sprint with number four T-Mobile.
Queried about the report, Sprint and SoftBank declined to comment.
The Journal reported that T-Mobile has refused talks with French telecom operator Iliad, declining to even allow access to financial information for a bid.
Iliad made a surprise $15bn bid for a controlling stake in T-Mobile, seeking to merge the US operator with the similarly aggressive brand Free, which provides discount Internet and wireless access.
Iliad declined to comment on the report.
The Journal, citing people familiar with the Iliad offer, said T-Mobile considers the offer too low and that there was no significant dialogue between the companies. The Financial Times also reported T-Mobile was preparing to reject the offer.
Iliad’s founder Xavier Niel told the Journal last week the company’s offer for US-based T-Mobile is “real” and that he is open to working with partners on a deal.
T-Mobile, majority owned by Germany’s Deutsche Telekom, has boosted its subscriber based to over 50 million in the past quarter.
The Wall Street Journal said US regulators wanted to maintain the four major wireless carriers, fearing any new consolidation would hurt consumers. SoftBank’s chief Masayoshi Son, during a US visit in March, had argued that a stronger number three carrier could better challenge the two market leaders, Verizon and AT&T.
In 2011, US regulators blocked AT&T’s effort to buy T-Mobile, claiming it would be harmful to consumers and competition.
Meanwhile, the US wireless carrier Sprint said yesterday it was replacing its chief executive after an apparently bungled effort to take over rival T-Mobile.
Sprint said its new president and CEO would be Marcelo Claure, who founded and heads Brightstar, a subsidiary of Sprint’s majority owner, SoftBank of Japan.
Claure, 43, replaces Dan Hesse at the helm of the third largest US mobile group, which was widely believed to be coveting T-Mobile.
In a statement, Claure did not make any reference to T-Mobile but said: “In the short-term, we will focus on becoming extremely cost efficient and competing aggressively in the marketplace.”
“While consolidating makes sense in the long-term, for now, we will focus on growing and repositioning Sprint,” he added.
Although Sprint has not publicly acknowledged bidding for T-Mobile, SoftBank chief Masayoshi Son has stated that he wanted a stronger number three carrier to challenge US market leaders Verizon and AT&T.
AFP
