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Sprint, T-Mobile Reportedly Revive Merger Talks

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Sprint, T-Mobile Reportedly Revive Merger Talks
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Just five months after T-Mobile US Inc (NASDAQ: TMUS) and Sprint Corp (NYSE: S) abandoned merger talks, the two are back at the table in preliminary discussions, according to the Wall Street Journal.

T-Mobile popped 4.3 percent and Sprint 17.8 percent on the report.

Why It’s Important

The deal would unite two of the nation’s largest service providers to increase competition for Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T).

The consolidation would also heighten competition among tower operators and provide a potential opportunity for cable businesses down the line.

CROWN CASTLE In/SH SH (NYSE: CCI), American Tower Corp (NYSE: AMT) and SBA Communications (NASDAQ: SBAC) each fell at least 4 percent on the revived merger talks.

What’s Next

There are a number of reasons to doubt the prospects of a deal.

For one, this is the third time in four years that the parties have explored a merger. Their last attempt ended over disputes about the controlling entity. Sprint is 85-percent owned by SoftBank Group Corp, while Deutsche Telekom owns T-Mobile.

At the same time, the government is currently engaged in an antitrust battle to block AT&T’s purchase of Time Warner Inc (NYSE: TWX).

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Image credit: Mike Mozart, Flickr

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