Sprint Corp (NYSE: S)'s potential merger with
T-Mobile US Inc (NASDAQ: TMUS) is now off the table
as the parent companies of both wireless companies
failed to reach a merger agreement after months of talks.
Shares of Sprint were trading lower by 10 percent Monday morning, while T-Mobile's stock was lower by more than 5 percent.
A combined Sprint and T-Mobile company would have boasted more than 130 million wireless subscribers in the U.S. and put it in a
better position to compete against larger rivals. The news shouldn't necessarily come as a surprise to investors as reports surfaced last week
the talks were likely to end soon with no agreement. Instead, Sprint announced two strategic actions on that could boost its
business moving forward.
Multi-Year Deal With Altice
First, Sprint announced a new multi-year strategic
agreement with Altice USA Inc (NYSE: ATUS) in which
Altice will be given access to Sprint's network to offer its clients mobile voice and data services. Altice will be given access to
Sprint's full MVNO model and in exchange Altice will leverage its network to support Sprint's densification efforts.
Softbank Increases Stake
Second, Sprint's parent company, SoftBank Group, confirmed it plans on increasing its ownership stake in Sprint. The
Japan-based company will be buying Sprint's outstanding common stock through open market transactions and doesn't intent to
increase its ownership level above 85 percent.
Masayoshi Son, Chairman & CEO of SoftBank and Chairman of Sprint, said, "We
are entering an era where billions of new connected devices and sensors will come online throughout the United States. Continuing
to own a world class mobile network is central to our vision of ubiquitous connectivity. Sprint is a critical part of our plan to
ensure that we can deliver our vision to American consumers and we are very confident in its future."
Related Links:
Will
They Or Won't They? Conflicting Reports Muddy The Waters For Potential Sprint-T-Mobile Merger
AT&T,
Verizon The Likely Winners In The Event T-Mobile-Sprint Deal Rumors Ever Come To Fruition
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Mike Mozart, Flickr
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