The active spectrum auction will make analysts wait even longer to find out the plans SoftBank has in store for its U.S. carrier, Sprint. SoftBank Group Corp leaders have suggested it will give control of Sprint to T-Mobile’s parent company, Deutsche Telekom to finalize a merger between the two carriers. While sources have told Reuters this is true, the two companies have not started negotiations to avoid violation of anti-collusion rules set by the U.S. Federal Communications Commission. The rules ban discussions between rivals during an airwaves auction. When the auction ends in April 2017, negotiations between the companies will begin in earnest, Reuters reports.
Merging the two carriers has been a delicate topic since the idea was reluctantly dismissed by SoftBank in 2014. U.S. antitrust regulators were wary of the merger that would have put SoftBank in control of the combined Sprint and T-Mobile networks. The market value of T-Mobile has increased in the past two years to $50 billion, and Deutsche Telekom no longer wants to part with the carrier.
The advent of 5G does bring uncertainty to the situation. Evolving wireless technology makes the third and fourth largest U.S. carriers attractive acquisitions for companies like Comcast Corp. and DISH Network Corp. Together, Sprint and T-Mobile have 131 million subscribers, an attractive number if antitrust officials do not interfere.
According to Reuters, Barclays analysts are uncertain regulatory agencies will switch stances after sanctioning a four-player market. However, FCC chairman Ajit Pai is considered more business-friendly than his predecessor, who adamantly opposed a merger. While some analysts argue against a merger because it will raise costs and cut U.S. positions, SoftBank chief executive Masayoshi Son pledged to create 50,000 jobs in the United States.
February 22, 2017
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