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Sprint parent SoftBank is in direct talks with T-Mobile US parent Deutsche Telekom on a deal to buy T-Mobile, according to a Bloomberg report.

A deal combining the No. 3 and 4 U.S. operators would have at least two banks providing Sprint with financing a takeover of T-Mobile, reports Fierce Wireless. Deutsche Telekom wants an all-cash offer for T-Mobile, which has a market value of about $26 billion, and SoftBank is working to finance a deal to provide as much cash as possible.

The market share of the Big Four is about 93 percent. Any deal between Sprint and T-Mobile would face an uphill battle with regulators, since it reduces the big four to the big three. Further, the FCC’s 600 MHz spectrum auctions are scheduled to start next year, and that income is crucial for FirstNet, the first responder LTE network.

Jonathan Chaplin, an analyst at New Street Research, believes Sprint may agree to host Dish’s wireless airwaves on its network, allowing the satellite company to enter the mobile-phone business.

If that’s the case, regulators may approve a Sprint takeover of T-Mobile because a new competitor would emerge, Chaplin said. Sprint has begun to test a wireless Internet service with Dish in Corpus Christi, Texas, a potential prelude to a future partnership.

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One Response to “Sprint/T-Mobile Deal: Heating Up?”

As standalone entities neither Sprint nor T-Mobile have the resources to battle AT&T or Verizon.

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