Will Sprint Move Forward With T Mobile Deal?

Citing a meeting with Sprint's S management team on May 15, Citigroup analyst Michael Rollins wrote, "Sprint management still seems to have a strong interest to pursue a merger scenario with T-Mobile TMUS". Rollins noted that this is despite the common perception that a merger of the two companies would likely fail to get approval from regulatory agencies.

Timotheus Hottges, CEO of Deutsche Telekom AG -- T-Mobile's parent company, has expressed doubt that a deal would be likely to move forward and has commented, "We're getting signals from the regulatory authority as well as antitrust supervisors that such a merger isn't seen as expedient." Additionally, T-Mobile's parent company has requested a $1 billion breakup fee from Sprint in the event that they are unable to receive regulatory approval, according to Wall Street Journal report.

This would not be the first time an acquisition of T-Mobile would be blocked by the FCC. In 2011, AT&T's T attempt to acquire T-Mobile was blocked and resulted in a $3 billion breakup fee for AT&T. Randall Stephenson, AT&T CEO, has mirrored Hottges' sentiment saying he would be surprised if a deal were allowed to happen.

The deal is still shrouded in uncertainty and may even have regulators divided. According to Reuters, Democratic Commissioner Jessica Rosenworcel acknowledged that it may not be viable for Sprint and T-Mobile to remain as independent companies. In contrast, FCC Chairman Wheeler and U.S. Justice Department antitrust chief William Baer remain skeptical about the merger of two of the country's largest wireless providers.