According to a new Reuters report, eight banks, including international banks JPMorgan Chase & Co, Goldman Sachs Group, Deutsche Bank AG, Bank of America Merrill Lynch and Citigroup Inc, have agreed to help finance the acquisition of T-Mobile. All in all we're looking at a $40 billion deal, $8 billion more than previously thought.

If all goes well, the banks are planning on finalizing deal terms in the coming month. The merger could then be announced in August, say unnamed Reuters sources.

"We can make it more effective by getting bigger scale," Sprint parent company SoftBank's chief executive Masayoshi Son said Tuesday to reporters. "Us becoming a more credible competitor in scale is something good for American consumers and citizens."

The road won't be easy for the merger to go through, however. The FCC and Department of Justice's antitrust division have both said they are wary of further consolidation in the U.S. wireless industry. If the No. 3 and No. 4 carriers in the United States combined, they say, customers will be left with less choices, ultimately resulting in a marketplace worse off than before.

"I brought the network war and price war [to Japan]. I'd like to bring that to the States," Son said to industry officials in March. "I would like to provide an alternative to the oligopolistic situation that two-thirds of American households can only get access to one or two providers. I'd like to be a third alternative with 10 times the speed and lower price."

Approvals from the FCC and the antitrust division are needed in order for the merger to take place. Should Sprint back out at any point, the company is reportedly expected to pay $2 billion break up fee. The same goes for T-Mobile and its parent company Deutsche Telekom AG, except the break up fee on their end is $1 billion.

AT&T attempted a similar takeover of T-Mobile three years ago, where similar roadblocks resulted in AT&T paying T-Mobile a break up fee of $6 billion. The experience has AT&T pessimistic about Sprint's efforts.

"The problem as I see it is the way the government shut our deal down. They wrote a complaint and a very specific complaint. You're consolidating the industry from four to three national competitors," AT&T chief executive Randall Stephenson said Tuesday during an event at the Economic Club of Washington, D.C.

As a way of hedging its bets, T-Mobile is reportedly interested in buying up low frequency spectrums from other carriers as a way to stand on its own two legs if Sprint can't come through.

"If the government wants us to have a competitive environment, you are going to make sure that the duopoly doesn't use their prowess to crush the little guys and have this sub-1 GHz spectrum be moved all to them," said T-Mobile CEO John Legere in an interview on television show "Bloomberg West" earlier this year.

"We're all going to need better scale and capability. The question starts to be: How do you take the maverick and supercharge it? We either need more spectrum and capability, a lot more investment, or we need consolidation."

John Legere is tipped to head the new Sprint and T-Mobile company, which would operate under the T-Mobile brand.

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