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Sprint Gives Up Pursuit Of T-Mobile

Overland Park, Kan. — Sprint and majority owner SoftBank have given up their pursuit of a Sprint/T-Mobile merger that they hoped would create a stronger national carrier, citing the difficulties of getting approval from federal regulators, the Wall Street Journal reported.

The long-struggling Sprint, meantime, said it replaced CEO Dan Hesse with Marcelo Claure, chairman/CEO of cellular distributor Brightstar, which was purchased early this year by SoftBank. Claure also sits on Sprint’s board.

Sprint, the No. 3 carrier by subscriber base, has lost money every year since 2007, and its subscriber base has been shrinking in the wake of network disruptions caused by a massive network overhaul that is now largely complete. T-Mobile, the reinvigorated No. 4 carrier, has been posting subscriber gains of more than a million in recent quarters, though it is not profitable yet.

A merger would have reshaped the retail landscape because the two carriers likely would have consolidated their store counts to eliminate overlapping stores. Many wireless specialty stores that carry the T-Mobile name but aren’t operated by T-Mobile also might have been closed down. And CE retailers that sell service from multiple carriers would have had one less carrier represented in their stores.

A separate bid for T-Mobile is pending from French carrier Iliad, which launched service in France in 2002 with sharp pricing. Iliad bid $15 billion for a 56.6 percent stake in T-Mobile, which is majority-owned by German’s Deutsche Telekom, the Wall Street Journal reported.

Both Iliad and Japan’s SoftBank, Sprint’s majority owner, are known for disrupting their markets with aggressive pricing and promotion.