Sprint and T-Mobile Reach Merger Agreement, Plan for 'World's Best' 5G Network
Sprint and T-Mobile have finally reached a merger agreement, which means if approved by regulators, two of the four major carriers in the United States will combine into one entity in an all-stock deal worth billions.
The new combined company will be named T-Mobile and current T-Mobile CEO John Legere will serve as the Chief Executive Officer. Sprint and T-Mobile say the company will be a "force for positive change" in the U.S. wireless, video, and broadband industries, supercharging T-Mobile's Un-carrier strategy and allowing the new company to "lead in the 5G era."
The New T-Mobile will have the network capacity to rapidly create a nationwide 5G network with the breadth and depth needed to enable U.S. firms and entrepreneurs to continue to lead the world in the coming 5G era, as U.S. companies did in 4G. The new company will be able to light up a broad and deep 5G network faster than either company could separately.
T-Mobile deployed nationwide LTE twice as fast as Verizon and three times faster than AT&T, and the combined company is positioned to do the same in 5G with deep spectrum assets and network capacity.
According to the terms of the deal, T-Mobile plans to exchange 9.75 Sprint shares for each T-Mobile share. Deutsche Telekom, T-Mobile's parent company, will own 42 percent of the combined company and SoftBank, Sprint's parent company, will own 27 percent. Deutsche Telekom will have voting rights over 69 percent of the new company and will appoint nine of its 14 directors, while Sprint will appoint four.
T-Mobile CEO John Legere said that the combined company will "create a fierce competitor" that's able to "deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience," while current Sprint CEO Marcelo Claure, who will serve on the board of the new company, said that the merger will make the U.S. a "hotbed for innovation."
"We intend to bring this same competitive disruption as we look to build the world's best 5G network that will make the U.S. a hotbed for innovation and will redefine the way consumers live and work across the U.S., including in rural America. As we do this, we will force our competitors to follow suit, as they always do, which will benefit the entire country. I am confident this combination will spur job creation and ensure opportunities for Sprint employees as part of a larger, stronger combined organization, and I am thrilled that Kansas City will be a second headquarters for the merged company."
Along with the faster rollout of 5G technology, Sprint and T-Mobile say the merger will lead to job creation, lower prices for consumers, improved coverage, and "unprecedented network capacity."
The deal between Sprint and T-Mobile still needs to be approved by antitrust regulators in the United States, but if it goes through, the U.S. will have three major carriers rather four. The combined Sprint and T-Mobile company will have nearly 100 million customers, putting it second only to Verizon.
Sprint and T-Mobile are aiming to close the deal "no later" than first half of 2019. More information about the merger can be found in the press release and in a new "All for 5G" website the two companies have created.