T-Mobile US Inc. (NASDAQ: TMUS) and Sprint Corp (NYSE: S) have made progress in negotiating merger terms and are aiming to complete the deal as early as next week, according to Reuters, citing sources familiar with the matter.
Sprint shares rose by 8 percent and T-Mobile shares rose by 1.5 percent on Friday.
If the two companies combine, they would have more than 127 million customers, creating a stronger competition against Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T).
The merger would also ramp up the race for 5G technology. Many wireless communication carriers are beginning to test the technology, but have not implemented it nationwide yet.
T-Mobile’s majority owner Deutsche Telekom AG and Sprint’s majority owner SoftBank Group Corp. are now considering an agreement that would decide how they exercise voting control over the merged company, said Reuters, citing the sources.
This would allow Deutsche Telekom to consolidate the combined company on its books, even without owning a majority stake, the sources said.
T-Mobile and Sprint have met multiple times in the past four years regarding merger talks, but plans fell through. The most recent one in November when the two were near the end of closing the deal, Softbank’s Chief Executive Officer, Masayoshi Son, pulled out of the talks.
Talks began once again earlier in April when the Wall Street Journal reported that talks began again and they were in the preliminary stages.
Deutsche Telekom and T-Mobile are in the process of finalising the debt financing package, which they will use to fund the deal, said the sources.
The sources said the deal going through is unknown and may not happen. The merger between the two carriers can reflect AT&T’s attempted acquisition of Time Warner, which was blocked by regulators, saying that it would dominate the media industry and provide less to consumers.