Newspaper article International New York Times

Sprint Ends Its Attempt to Purchase T-Mobile ; Board Abandons Plans, Fearing Antitrust Concerns Would Derail Any Merger

Newspaper article International New York Times

Sprint Ends Its Attempt to Purchase T-Mobile ; Board Abandons Plans, Fearing Antitrust Concerns Would Derail Any Merger

Article excerpt

Sprint's board cited concerns that American antitrust regulators would block a deal for T-Mobile, the fourth-largest wireless provider in the United States.

Sprint and its corporate parent, the Japanese telecommunications giant SoftBank, have decided to end their pursuit of T-Mobile USA after conceding that antitrust regulators would block a deal in an industry that is dominated by just a few large players.

The decision was made at a Sprint board meeting on Tuesday afternoon, a person briefed on the matter said. It marks the second failed effort by large American wireless carriers to merge in three years. And it represents a serious blow to SoftBank's efforts to develop a big new challenger to the two giants of the American cellphone industry, Verizon and AT&T.

Meanwhile, T-Mobile may have to contend with another takeover bid. A French mobile upstart, Iliad, disclosed last week that it had bid $15 billion for a 56.6 percent stake in T-Mobile US.

Deutsche Telekom spurned the offer. Iliad is now reportedly seeking additional partners to shore up a revised bid, according to news reports. Still, analysts have questioned whether a merger with T-Mobile would make sense -- and whether Iliad could afford a takeover.

With no deal for now, it remains to be seen what paths Sprint and T-Mobile will take as smaller competitors to the enormous titans of their industry. Combined, the two control less than a third of the wireless market in the United States.

In recent years, T-Mobile has shaken up the industry with an array of novel pricing plans, gaining admirers among both analysts and investors, but Sprint has lost customers for several quarters as it struggles to upgrade its network.

"They have a lot of wood to chop," Craig Moffett, a research analyst at MoffettNathanson, said of Sprint. "They will have to spend a fortune to fix their network, and they will very likely have to cut prices to stay competitive at the same time."

Sprint is making at least one major change in the near term. On Wednesday morning, the company said it would replace its current chief executive, Daniel R. …

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