And you thought it was over. Deutsche Telekom, 60 percent owner of T-Mobile, is looking to renegotiate the deal that it struck with Sprint two years ago in the merger, which gained approval from a federal judge this week, according to the Financial Times.
Two days ago, Reuters reported that investors were looking only a “modest potential haircut,” perhaps 9 percent, with Sprint shares trading at $8.30 on Tuesday, a 14-percent discount to the $9.60 per share price in the all-stock deal.
Any deal renegotiation is going to be resisted by Softbank, owner of Sprint, which has seen its profits drop 99 percent based on massive Vision Fund losses.
“The stand-off [between Deutsche Telecom and Softbank] sets the stage for what could be a protracted and bitter battle to get the deal done,” the Financial Times wrote.
Indeed, it has been a rough two-year stint in regulatory and judicial purgatory for Sprint. During that time, it lost 400,000 customers and watch its debt rise from $33 billion to $34.1 billion.
Lynnette Luna, principal technology analyst at GlobalData, a leading data and analytics company, noted that the delay has also damaged T-Mobile.
“Waiting this long to merge eroded the ‘New’ T-Mobile’s ability to come to market with the first high-quality nationwide 5G network, but it still has an envious 5G spectrum position in the United States,” she wrote.
Luna’s noted T-Mobile’s overwhelming need to move forward quickly with the integration of its network with Sprint.
“The trick now is for T-Mobile to quickly put Sprint’s spectrum into use and beat its rivals with a 5G network that is clearly differentiated in terms of coverage and speed,” she wrote. “While Sprint has seven 5G markets up and running, it has been in a holding pattern waiting for the merger to go through. If the merger had closed one year ago, T-Mobile would have had an overwhelming head start over its rivals in 5G. T-Mobile will be able to redeploy Sprint’s spectrum quickly, but that process will likely take a year or more.”