Sprint and T-Mobile Are Talking Merger Again

Sprint and T-Mobile talk merger
Sprint and T-Mobile talk merger

SprintNextel (S) and T-Mobile USA are reportedly in merger talks once again, as both companies seek to stop the flow of customers defecting to larger cell-phone service providers.

The U.S.'s third- and fourth-largest mobile providers have discussed merger plans in the past but haven't been able to agree on who would acquire whom.

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Current negotiations have their own impediment. The two parties disagree about how much T-Mobile is worth, and a quick deal is unlikely, The Wall Street Journal (subscription) reported, citing people familiar with the talks. Who would lead the newly combined company is also in dispute.

The Journal reported that Sprint has set conditions for a deal, including that it own more than half of a combined company and decide who would run the expanded business, a person familiar with the situation said. Directors likely would favor retaining Sprint CEO Dan Hesse.

One reason the companies may be pursuing a merger is to create a larger subscriber base. Sprint has stemmed the number of subscribers leaving for other carriers, but it still lacks the heft needed to compete for popular devices, such as Apple's (AAPL) iPhone, offered by rivals AT&T (T) and Verizon Wireless, which is part-owned by Verizon Communications (VZ).

The deal would also aid T-Mobile in its effort to build next-generation networks without big outlays.

T-Mobile parent company Deutsche Telekom (DTEGY) wouldn't say whether talks are going on. It did say all options are open for its U.S. unit, including a sale, the Journal reported.

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