An agreement between Sprint Corp. (NYSE: S) and T-Mobile US Inc. (NYSE: TMUS) has been reached, according to a report from Reuters. Sprint will pay a premium of around 17%, or about $40 a share, for T-Mobile in a deal valued at $32 billion, according to Reuters’ source.

At least one analyst believes that T-Mobile is worth more than that:

T-Mobile US should be worth more than that given that the synergies should exceed $20 billion, Deutsche Telekom would share some of the execution risk and Sprint would be getting control … Somewhere in the high 40s would be more appropriate.

Sprint, which is controlled by Japan’s Softbank, and T-Mobile, which is controlled by Germany’s Deutsche Telekom, would become the third-largest phone company in the United States if the deal is done, but their combined subscriber base would be much closer the subscriber bases of AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ).

Still under discussion between the two firms are the stake that Deutsche Telekom will retain and the size of the breakup fee if the deal is rejected by regulators. The German firm is expected to take a 15% to 20% stake in the combined company and is seeking a breakup fee in the neighborhood of $3 billion. Deutsche Telekom received a $6 billion payment from AT&T when its bid for T-Mobile was rejected. Sprint and Softbank are reportedly offering a breakup fee of $1 billion.

The Federal Communications Commission (FCC) has made clear that it is opposed to further consolidation in the wireless phone market. The U.S. Department of Justice would also have to approve the deal, and unless the two companies make some major concessions, neither agency is likely to give its go-ahead to the merger.

Sprint shares traded up about 0.5% in the first few minutes of trading Thursday to $9.46, in a 52-week range of $5.61 to $11.47.

T-Mobile shares traded down 1.8%, at $33.67 in a 52-week range of $20.31 to $35.50.

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