Over the weekend, further rumors were published detailing virtually all the speculation we’d already heard last week. Deutsche Telekom has agreed a deal with SoftBank to sell its majority stake in T-Mobile US. As part of the deal, DT – it’s rumored – will have a 15-20 percent share in the new, merged company.
One thing we’ve never been sure of is what would happen with the company name. Clearly, it was never going to be a hideous Frankenstein job combining parts of the two different monikers. As much as I like the sound of T-Mint (makes me thirsty for herbal tea), I always assumed that one of the names would prevail, and the other would die. In my Magenta-colored brain, clearly T-Mobile was the best choice of the two. Its brand has become the cool kid of all the carriers, and is making moves that the other major network operators can only poorly imitate. But, that’s not going to happen either. At least, that’s what YouTube channel, TK Tech News claims.
The channel’s sources – who seemingly know the ins and outs of the deal – claim that the company will take on the parent company’s name. SoftBank will buy T-Mobile, and merge it with Sprint to create its own US presence – SoftBank USA. If true, it would see the brand we know and love disappearing, presumably along with the Magenta livery. On the plus side, John Legere is heavily touted as being the number 1 choice for the CEO role of this new company. News we’ve heard repeated many times in the past.
But before we get ahead of ourselves, and cry ourselves to sleep at the disappearance of our favorite brand, there’s still the hurdle that is the Department of Justice. It could still seek to block this merger on anti-competitive grounds. Something – we know – it has done in the past when AT&T tried to buy out the company in 2011. That said, it is worth noting that this isn’t exactly the same. If AT&T had been successful, it would have created a huge monopolizing carrier. It would have – at the time – been the only major GSM network operator, with both VZW and Sprint using CDMA. It would also have made the distance between the #1 and #3 carrier even greater, making the market much less competitive.
This time out, it’s very different. And that’s perhaps why the DoJ won’t be as strong in its actions. If Sprint and T-Mobile do join forces, in terms of subscriber bases, it’d create a carrier that virtually equals both AT&T and Verizon. There would be three fairly evenly matched carriers. And that’s good for competition.
As much as we hate hearing about it, it very much sounds like this deal is happening. For those of you dead against the idea, there’s still the regulatory bodies to hope on. FCC and DoJ disapproval has been noted in the past, and shouldn’t be ignored. But for the mean time, it’s hard to carry on as if nothing’s going on. Because, clearly, something is.
What are your predictions for this proposed merger? Do you think SoftBank will get its way and push the deal through? Or will the regulatory hurdles trip the Japanese carrier up?