SoftBank Group, Inc., Sprint’s parent company, may revive selling the carrier to T-Mobile’s parent company, Deutsche Telekom, according to unnamed sources cited by Reuters.
The news agency said that SoftBank is reportedly frustrated with Sprint’s growth and is ready to give up control of the company and take a minority interest in T-Mobile.
With limited information provided by Reuters’ sources, the proposed acquisition could be a fishing expedition to test whether there will be overwhelming regulatory scrutiny or the sources’ contacts could have been influenced by SoftBank CEO Masayoshi Son’s comments during a recent analysts call.
“We may buy, we may sell. Maybe a simple merger. We may be dealing with T-Mobile, we may be dealing with totally different people, different company,” said Son.
Three days prior to Reuter’s Friday story, TV personality Jim Cramer interviewed T-Mobile CEO John Legere, asking him about the possibility that T-Mobile may be acquired.
“I’m humored by this conversation that’s going on,” Legere told Cramer. “First of all, we’re anti-collusion, so nobody’s talking to anybody.”
It is not known if Legere was referencing incentive auction bidding, but Reuters did.
“SoftBank has not yet approached Deutsche Telekom to discuss any deal because the U.S. Federal Communications Commission has imposed strict anti-collusion rules that ban discussions between rivals during an ongoing auction of airwaves,” Reuters said, according to their sources.
They also said that after the auction ends in April, the two parties are expected to begin negotiations.
Those statements appeared in U.S. and international media, suggesting that since T-Mobile is an active bidder in the incentive auction that the FCC would find negotiations with SoftBank to be in violation of the FCC’s forward auction communications rules in effect “until the results of the incentive auction are announced by public notice.”
If those statements are not in error, Reuters has unwittingly unearthed a larger story that SoftBank is an active bidder in the incentive auction under another name.
Two years ago, Sprint and T-Mobile petitioned the FCC to allow joint bidding arrangements in the auction, to allow competitive carriers the economies of scale necessary to outbid AT&T and Verizon.
Although the proposal failed, T-Mobile became a key player in the auction, but in September of 2015, Sprint said that it had analyzed its spectrum holdings and had decided to pass on bidding, and its focus would be on improving its network and market position.
In March of 2016, CTFN furthered a rumor that SoftBank “might acquire” spectrum in the auction by setting up a new bidding company, and it would later sell it to Sprint or others.
The story was picked up nationally by industry media.
However, unless SoftBank’s new entity, carefully disguised as one of the 62 qualified bidders, is in the auction, it is most likely that they would not appear to be collusive if auction details were not disclosed if Son initiated discussions with T-Mobile and Deutsche Telekom.
Yesterday, an analyst from 24/7 Wall Street made a broad jump after reading the Reuter’s article, speculating that AT&T could be back in the game of courting a T-Mobile buy – solely based upon their recent M&A activities, but he ends his comments with a confusing: “Maybe the AT&T deal with T-Mobile deal is the wrong possibility to look at …”.