BREAKING: Sprint will not pursue T-Mobile deal

BREAKING: Sprint will not pursue T-Mobile deal

T-Mobile store in California. (Via Wikipedia)
T-Mobile store in California. (Via Wikipedia)

WASHINGTON, August 5, 2014 – According to breaking wire reports, Sprint (S) has decided to give up its attempt to join with Deutsche Telekom-owned T-Mobile (TMUS), is abandoning its pursuit of the smaller wireless provider due to regulatory issues deemed likely to hamper or scuttle the arrangement.

News that the deal was likely off sent the stock in Sprint down some 1 percent in after-hours trading, while acquisition candidate T-Mobile plummeted some 6 percent. The price movements are likely to continue in the same direction in early trading Wednesday morning.

The likeliest major hurdle in the teaming of these two troubled companies is the current Administration’s rock-solid but not entirely rational insistence that there must be at least two competitors to mobile and landline giants AT&T (T) and Verizon (VZ). While that goal is theoretically admirable, neither S nor TMUS has the economic or technical chops to compete against AT&T or Verizon.

The Wall Street Journal also brought to light a surprise bid for TMUS by French wireless and landline carrier Iliad SA, something else that may have soured Sprint’s bidding move, although TMUS is said not to favor that move.

Regarding the competitive U.S. telecom landscape, despite the apparent desires of the current Administration in Washington, Sprint, which now benefits from the much-deeper pockets of its Japanese majority owner Softbank Corp., is still finding it difficult to compete with the two majors, although Softbank claims major improvements in the quality of Sprint’s U.S. network.

Fallout from the Sprint decision is not likely to improve the tone of August’s already shaky trading mood.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17