Bloomberg, which first reported that Sprint was in talks with banks on Thursday morning in Asia, said the carrier was also talking to Mizuho Financial Group and Citibank. Softbank is expected to make a formal offer in June or July, Bloomberg added.
Sprint spokeswoman Roni Singleton told Reuters the company does not comment on rumors and speculation. T-Mobile and SoftBank both declined to comment on the Bloomberg report.
Sprint is facing a battle ahead with U.S. regulators who oppose consolidation in the wireless market on the basis it would inhibit competition. The company is aware it may have to give up some of its spectrum holdings to win over critics, the source said.
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Two of the most vocal opponents to the deal are Federal Communications Commission Chairman Tom Wheeler and U.S. antitrust chief William Baer, who have pointed to T-Mobile's success since U.S. authorities rejected a 2011 merger between AT&T and T-Mobile on the grounds the market needs at least four major players to be competitive.
The failure of that deal cost AT&T a $6 billion break-up fee, a penalty Sprint feels confident it can avoid, the source said, adding that it is leaning towards having Deutsche Telekom, which currently owns 67 percent of T-Mobile, retain part of that stake.
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SoftBank chief executive Masayoshi Son is lobbying regulators by arguing his purchase of a second U.S. mobile operator would break up a cozy oligopoly dominated by AT&T and Verizon Communications, pointing to the price war he initiated when he took over Vodafone's failing Japanese operation eight years ago.
T-Mobile has a market cap of $23.52 billion, according to Thomson Reuters data.
Discounts help T-Mobile add more customers
T-Mobile US said it added a net 2.4 million customers in the first quarter, up from 579,000 a year earlier, as the company's aggressive discounts won over customers.
The No. 4 U.S. mobile operator's revenue rose 47 percent to $6.88 billion in the three months through March 31, boosted by discounts and promotions that have disrupted an industry dominated by Verizon and AT&T.