Inability to jointly bid on spectrum was the last straw in concluding that the deal would not receive regulatory approval, a source told CNBC, after the Federal Communications Commission (FCC) said last week that it would propose rules that would prevent Sprint and T-Mobile from bidding together in a crucial coming spectrum auction.
"The Sprint-T-Mobile deal is purely a regulatory issue. The U.S. Justice Department told them that the winner will set a very high bar and the FCC told them last week that the two companies will not be allowed to bid on Spectrum together," Scott Nations, chief investment officer & president at NationsShares, told CNBC.
"[So] what next for T-Mobile? We know they've been on the block... [a] European acquirer will probably be the best outlet for T-Mobile. Part of the problem is that Sprint and T-Mobile bolster the lower-end of the phone market in the U.S. so if a foreign carrier can make that work for them, we'll see T-Mobile go," he said.