Sprint and T-Mobile are close to agreeing to a deal to merge two of the four largest U.S. wireless carriers, Reuters reports, citing multiple sources familiar with the negotiations.
The unnamed sources conceded the deal could still fall through.
Sprint, based in Overland Park, is the nation’s fourth-largest wireless carrier, and T-Mobile is the third-largest and fastest-growing
A merger between them would create a company with more than 130 million subscribers, bringing it close to the number held by Verizon and AT&T, Reuters reported.
A merger could hurt consumers, according to an analysis by MarketWatch, which predicted the elimination of a low-cost alternative in Sprint compared to the other companies unlimited plans could be threatened and, because T-Mobile and Sprint use different network technology, users may need to purchase new phones in order to benefit from an expected expanded network coverage area.
Chris Mills, news editor at BGR, a news website focused on mobile technology and consumer electronics, told MarketWatch that a merger would be “devastating for consumers in the long run.”
However, the CEO of Sprint’s largest shareholder, SoftBank Group Corp., told Bloomberg that a merger could lift the industry’s other competitors, improving service to customers.
“It makes sense not to have just two with such big market-share and two little ones,” Masayoshi Son said. “Three is a real fight, a real competition.”
Pursuit of an attempted T-Mobile-Sprint merger was dropped in 2014 after the two sides conceded antitrust regulators would have blocked the deal.
Bloomberg reported President Donald Trump’s appointed regulators have not signaled an “insistence on maintaining a four-player nationwide wireless market, which was a feature of the preceding administration.”
The two corporations have reportedly agreed that Deutsche Telekom AG, which owns about 64 percent of T-Mobile, would place T-Mobile’s executive team in charge of a combined company. But SoftBank would remain a large minority holder.
The Star has previously reported that senior executives of Overland Park-based Sprint and T-Mobile had arranged for golden parachutes worth nearly $359 million. Sprint CEO Marcelo Claure’s is more than $130 million.
Claure said previously that a decision about Sprint’s future could come in the near future.
“We’ve had enough conversations to start making choices soon,” Claure said last month after Sprint announced its first quarterly profit in three years.
Shares of the two companies rose in early trading Friday, Reuters reported.
The Star’s Mark Davis contributed to this story.