Sprint, T-Mobile call off merger

With the holiday shopping season looming, retailers are making final preparations for their offerings in order to maximize profitability. After all there is a reason the day after Thanksgiving is dubbed “Black Friday.” For cell phone service providers Sprint and T-Mobile, this ostensibly means clearing the air about the suspected merger between them.

For months, speculation abounded regarding a potential marriage between the third and fourth largest cell service carriers in the United States. The union would have put pressure on the leaders in the telecom market, AT&T and Verizon. The proposed merger would have created a company that would have had 130 million subscribers. 

However, through a recent joint statement, the companies announced that they would abandon their plans for a merger, at least for now. This was the second attempt at joining forces. The first attempt in 2014 was aborted amidst concerns that regulatory agencies would strike the deal as being harmful to consumers because it would potentially stifle competition. It was rumored that the deal would be received favorably under the new administration.

While both companies praised the other’s efforts to find common ground, it is also suspected that Sprint’s $38 billion debt load was a major sticking point in the deal. While Sprint has increased its subscriber base over the past few years, it has come about as a result of discounts and it is believed that additional investments were needed for its infrastructure.

It remains to be seen whether a future merger attempt between these companies will arise, but it exemplifies the need for an experienced business law attorney.

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