Planned Merger of T-Mobile & Sprint
2018-07-19T-Mobile and Sprint plan to merge together in a $26 billion dollar agreement. The CEO of T-Mobile John Legere took to Twitter, announced the deal and made a video with Sprint CEO Marcelo Claure to reveal some details of the agreement.
- The merger will add a total customer base of 126 million, which will rival the two leading companies, namely, AT&T and Verizon.
- The merger can boost 5G technology performance which will give faster internet speed and connectivity.
- The 5G technology is difficult and expensive to implement that might be a reason to merge and scale.
T-Mobile and Sprint Corp. merger can shrink the four giant suppliers of nationwide telecommunication service to three. More than a 100 law firms are involved to smooth matters for the two companies. The merger is not to close until after the first quarter of 2019
. This is an all-stock deal of $26.5 billion dollars which will take T-Mobile owned by Deutsche Telekom AG, take control of Kansas based Sprint Corp. which is majority owned by SoftBank Group Corp. a Japanese owned business.
On June 19th Sprint and T-Mobile together filed the Public Interest Statement with the FCC. The Public Interest Statement offers many reasons for the merger:
- Can provide better service to rural America
- Better more Competitive 5G network
- Affordability increase in the data supply
- Job growth and innovation that will come with the new technology of 5G. With 5G, the technological growth of new products will help raise competition.
With the merger, consumers can be affected by many issues. This can surely affect the consumer wallet. More competition is generally better than less.
T-Mobile and Sprint were rejected to complete a merger in 2014 and that resulted in better prices for the consumer. T-Mobile became one of the first carriers to offer free voice, text and data plans. Sprint set up a similar plan and AT&T and Verizon offered a more competitive plan. The prices for service were slashed and according to the Labor Department dropped a whopping 13 percent for March 2016 to March 2017. T-Mobile became more flexible to attract more customers by illuminating long-term contracts. They started to accept different devices for their plan and extended network privileges to Canada and Mexico.
This positive competition was what the government wanted to see when they stopped the merger between Sprint and T-Mobile in 2014. The competition helps the middle class tremendously and opens the door for opportunity for everyone to have greater access to technology at a reasonable price.
There is a concern from the antitrust officials in the justice department. Some of them claim if the competition between Sprint Corp. and T-Mobile is gone then those that service the middle class will be eliminated. That will produce a stagnant society based solely on those who have the money.
On the brighter side, rural areas can see better service and connection.
With the rise of 5G technology more products can be seen to help move more competition. Customers from either company can use other company's network.
Read more about The Promise of the New 5G Networks.