As Sprint edges closer to a merger deal with T-Mobile, sources say the parties involved are bracing for a longer than expected approval process. This has triggered lenders to seek higher fees as part of the financing deals. Both Softbank, Sprint’s controlling shareholder, and T-Mobile shareholder Deutsche Telekom AG expect the regulatory approval process to take at least 12 months. Building in some cushion to the schedule, it is expected a drop-dead date will be set for around 18 months after an official announcement is made.
Besides the long regulatory process, Softbank and Deutsche Telekom also appear to be seriously considering being prepared for a legal challenge if the government rejects the deal. In 2011 when AT&T’s move to acquire T-Mobile was turned down, the company initially announced it would fight it in court, but eventually backed off citing the high costs of litigation.
Softbank’s Masayoshi Son revealed a little bit of the strategy the company may use to get around the U.S. government’s position that four players are needed in the wireless market. It appears the argument will be made that wireless carriers are more about providing Internet services, a market in which AT&T, Verizon, and Comcast are the major players. A merger of Sprint and T-Mobile would create a fourth alternative that could compete with those companies in offering high-speed wireless Internet services to consumers.
Sources indicate the primary companies involved in the merger talks are close to a deal with only details, notably fees for lenders, to be ironed out. An announcement could come as soon as August.
Come comment on this article: Softbank’s Son getting ready for long merger battle
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