T-Mobile US wants large breakup fee if Sprint bid falls through

Over the past few months, there have been ongoing rumors that Sprint is looking to bid on T-Mobile US in their ongoing efforts to remain relevant after years of losses and stagnant growth.

If the deal were to go through, which is certainly not a guarantee given the stringent FCC and DOJ, the new merged carrier would be able to compete with AT&T and Verizon in size and scale, breaking the duopoly in the nation. Sprint currently has 54 million subscribers and T-Mobile is quickly catching up, now at 49 million.

T-Mobile, which is majority owned by Deutsche Telekom, is no stranger to proposed acquisitions. AT&T tried to purchase the company in 2011 and the DOJ shut down the merger citing trust issues. For its troubles, T-Mobile received $4 billion in cash as a break-up fee, and additional spectrum. The move helped T-Mobile re-invent itself as the coolest carrier in the nation, and Telekom wants another large break-up fee if Sprint cannot complete the merger, with reports putting the figure at over $1 billion.

In addition, Telekom will not accept a buyout unless key T-Mobile executives keep their titles, and that the brand remains intact, meaning "T-Mobile," "Uncarrier" and other terms are not going away any time soon. CEO John Legere would need to be placed at the helm of the new company or at least have full oversight of the joint companies.

Source:
WSJ

Written by: Andre Yoskowitz @ 11 May 2014 15:10

KillerBug

T-Mobile...a company that likes early termination fees so much that they charge them to other cell companies!

11.5.2014 17:47 #1

hearme0

Please clarify.

Are you complaining about TMo or giving props? Is their early term fees any different than the others??

12.5.2014 13:48 #2

VictorJul

Their early termination Is different from others. Whereas others charge you just for leaving them, T-Mobile charges you for the remainder of the cost of the phone. (Instead of subsidizing the phones, they give you a loan on it and you pay it off with your bill.)

This ends up being about the same as everybody else for most people, but saves the customer an @$$ton of money if they bring their own phone, buy outright, or upgrade less often than every two years.

16.5.2014 18:34 #3

KillerBug

Originally posted by VictorJul: Their early termination Is different from others. Whereas others charge you just for leaving them, T-Mobile charges you for the remainder of the cost of the phone. (Instead of subsidizing the phones, they give you a loan on it and you pay it off with your bill.)

This ends up being about the same as everybody else for most people, but saves the customer an @$$ton of money if they bring their own phone, buy outright, or upgrade less often than every two years. That's not exactly right. They sell you the plan you describe...but then they put you on a contract anyway so you have to pay early termination fees plus you have to pay for the phone. Also, the contract auto-renews and they don't terminate service immediately when asked...so if you cancel on the day the contract ends they wait a day and then charge you an early termination fee for the new contract. If you cancel 3 days before the contract ends you still get charged the full early termination fee just for those 1-3 days. When I complained about this to their rep I was told I should have read my contract...it said nothing about any service contract at all (other than several conditions about service that they broke) so I called back and was told that by paying my bill I was agreeing to the fine print on the back of the bill (which I didn't get because I was out of town and it was on auto-pay) that said I was going onto contract and it would auto-renew. T-Mobile...the scummiest provider I've ever dealt with, every day suckering in more people with the same plan they used on my 3 years ago.

16.5.2014 21:03 #4

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