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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

August 5, 2014 at 4:19 PM

Report: Sprint kills plan to buy T-Mobile

Sprint has reportedly spiked its plan to acquire T-Mobile for $32 billion, ending the latest speculative rollercoaster ride for the Bellevue-based carrier.

The Wall Street Journal broke the news with a brief report saying that the regulatory hurdles were too high for Sprint to proceed.

Spokespeople for Sprint and T-Mobile declined to comment.

Regulatory concerns previously squashed AT&T’s 2011 attempt to acquire T-Mobile from Deutsche Telekom, which has been trying for years to sell the company that it acquired in 2000.

The FCC is particularly concerned about the effects of further consolidation in the wireless industry, which is dominated AT&T and Verizon, although industry watchers expect consolidation to eventually happen one way or the other and fourth-place T-Mobile is the most attractive takeover target.

Earlier today the Journal reported that T-Mobile had turned down a takeover offer that came out of left field from French tech company Iliad, which offered $15 billion. Yet Reuters reported yesterday that Deutsche Telekom wasn’t completely abandoning the Iliad offer, though it favored the higher offer from Overland Park, Kan.-based Sprint.

The drama continued with Bloomberg’s report on the demise of the Sprint deal. It noted that Sprint is also preparing to replace its chief executive, Dan Hesse, on Wednesday.

Earlier this year, word surfaced that if Sprint acquired T-Mobile, Hesse was likely to be replaced by T-Mobile’s sassy chief executive, John Legere, who has reinvigorated the company with aggressive offers and marketing moves.

Legere has also said T-Mobile’s resurgent brand, team and operations would continue after the merger.

That suggested T-Mobile’s Bellevue headquarters might have remained intact after the merger with Sprint. Clearwire wasn’t so lucky; it was shuttered after Sprint acquired that Bellevue wireless company last year.

I wonder if Sprint is going to end up acquiring just Legere. Regulators probably wouldn’t mind, as long as he doesn’t run afoul of profanity laws in Kansas.

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