T-Mobile has signed a new deal with Sprint in a move that could change the entire wireless landscape, and has left the US with three major cell phone companies. The deal is worth about $26.5 billion and it paves the way for a full merger between T-Mobile and Sprint. The offer also upped Sprint’s market value to $6.62 per share. The two companies are hoping that the merger will help them slash costs. They will also be able to compete more effectively with the other two major wireless providers in the country - AT&T and Verizon.
T-Mobile CEO John Legere will be in charge of the new company after the merger and will also oversee the full implementation of the merger agreements. Legere said in a video announcement posted on his Twitter account that joining forces with Sprint will help T-Mobile lower costs for consumers and lead the way to the new 5G technology.
According to Legere, T-Mobile’s LTE network deployed across the country is faster than Verizon and three times faster than AT&T. The new company wants to keep up this advantage even with the new 5G technology. The combined enterprise value of both companies after the merger is expected to hit $146 billion. Sprint accounts for about $59 billion of this amount.
The headquarters of the merged companies will still be located in the city of Bellevue, Washington, which is the current headquarters of T-Mobile. Sprint has always struggled to compete in the US wireless market. In the past few years, the company had been looking for a possible deal in order to strengthen its position, and it seems that the deal with T-Mobile has come at the right time. Sprint is owned by the Japanese conglomerate SoftBank. The wireless company has consistently posted a lot of losses in the US market and continues to have a lot of debts.
T-Mobile, on the other hand, has been on the rise. The company has steadily expanded its user base year after year. T-Mobile’s customer-friendly services and unlimited data plans have made the company an attractive option for many American consumers. The deal with Sprint is expected to cement this success and help T-Mobile achieve its full potential.
The two merged companies will have almost the same number of users as AT&T and Verizon. But there are still some skeptics who think that the merger will lower competition in the wireless landscape, leading to higher prices for consumers. The Communications Workers of America, a union that represents workers in this area, also says that at least 20,000 American jobs will be lost as a result of the merger.
Nonetheless, the merger will help both companies save costs. This will free up more capital that allows for intensive investments on the infrastructure of the new company. Eventually, this kind of investments will help lower costs for consumers. It’s also important to note that AT&T had attempted to buy T-Mobile back in 2011 but the deal fell through.