Breakthrough in T-Mobile, Sprint deal as companies are close to agreement

Deal talks

This isn't the first time T-Mobile US was in merger talks with another USA carrier. But even with a combined subscriber base of about 130 million customers, the merged company would still be slightly smaller than the two largest US carriers, Verizon and AT&T - who have around 146 million and 135 million subscribers, respectively.

According to the Reuters report, the majority of shares in the combined company would be held by T-Mobile owner Deutsche Telekom, while 40 percent to 50 percent would be controlled by SoftBank, the Japanese firm behind Sprint.

CNBC reported earlier this week that the two parent companies "have been in frequent conversations" regarding a stock-for-stock tie-up that would see Deutsche Telekom become the majority owner of the combined carrier. Although the terms are preliminary at this point, the two companies could finalize an agreement by October, according to sources familiar with the matter cited by Reuters.

The combination is expected to get close regulatory scrutiny to see whether the wireless market is getting too concentrated.

A successful merger would create a business with more than 130 million subscribers, just behind Verizon Communications Inc and AT&T Inc.

Neither Sprint nor T-Mobile would comment. Sprint and T-Mobile are now the third and fourth largest carriers in the country.

Will a T-Mobile & Sprint merger be the next big thing in the wireless market?

Sprint stock price jumped up almost 6 percent on Friday on reports of the possible deal; T-Mobile stocks were up marginally.

Last month, Sprint's Chief Executive Marcelo Claure said an announcement on merger talks should come in the "near future". The new proposed merger would also put the two companies under the microscope from regulators.

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