Sprint and T-Mobile agree to all-stock merger deal worth $26 billion
The boards of directors for carriers Sprint and T-Mobile have approved a $26 billion deal to merge the two companies, with John Legere at the head of the combined company.
The deal is the pair's third attempt to merge in as many years. If approved, Sprint, which has a market value of $26 billion, will merge with T-Mobile, which is worth around $55 billion. The pair have $60 billion of combined debt. The transaction values Sprint at 0.10256 shares per T-Mobile share.
SoftBank owns 85 percent of Sprint. Deutsche Telekom owns about 60 percent of T-Mobile, and it will consolidate the combined entity's earnings.
Verizon has more than 150 million wireless customers. AT&T reported 144 million subscribers at the end of the last quarter.
The deal is not guaranteed to succeed. The U.S. government still has to approve the deal, with international agencies likely to weigh in as well. But, even if the deal falls through because of regulatory concerns, Sprint consumers will be allowed to use T-Mobile's network.
The deal is the pair's third attempt to merge in as many years. If approved, Sprint, which has a market value of $26 billion, will merge with T-Mobile, which is worth around $55 billion. The pair have $60 billion of combined debt. The transaction values Sprint at 0.10256 shares per T-Mobile share.
T-Mobile and Sprint are the nation's third- and fourth-largest wireless providers respectively. Combined, the two will have 127 million customers.I'm excited to announce that @TMobile & @Sprint
have reached an agreement to come together to form a new company - a larger, stronger competitor that will be a force for positive change for all US consumers and businesses! Watch this & click through for details.— John Legere (@JohnLegere)
SoftBank owns 85 percent of Sprint. Deutsche Telekom owns about 60 percent of T-Mobile, and it will consolidate the combined entity's earnings.
Verizon has more than 150 million wireless customers. AT&T reported 144 million subscribers at the end of the last quarter.
The deal is not guaranteed to succeed. The U.S. government still has to approve the deal, with international agencies likely to weigh in as well. But, even if the deal falls through because of regulatory concerns, Sprint consumers will be allowed to use T-Mobile's network.
Comments
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As far as I am concerned this is great news, it just means better coverage in fringe areas
Maybe the idea is that customers with older handsets will continue to live with the legacy network in their respective pre-merger entity, and will get the benefits of the new networks in the combined entity only if/when they upgrade their phones.
That being said, Sprint still uses CDMA as their voice side backbone. (Disclaimer: I worked on the GSM side of the industry, so my CDMA knowledge is a bit limited). After the merger they will likely phase out CDMA, use VoLTE anywhere that has LTE coverage, and move Sprint over to GSM fallback (i.e. HSPA / 3G). In the meantime, there is no reason why TMO customers wouldn't get expanded LTE data coverage, and Sprint customers should have access to TMO's LTE network as well. It will take several years for the network to work as a seamless single network, but all customers should benefit pretty quickly after (if) the merger is finalized.
Curious if they merge, if they will start making new phones CDMA/GSM compatible until they can convert all towers to GSM. Either way, it is clear they want the combined network for easy 5G expansion, so they might not bother with legacy towers and only build upon the 4G/5G network.
Depends what are the costs to convert older towers to 5G, I suppose. I doubt they'd want to "shut down" any of the towers since a lot of those towers are locked into very long term land leases.
Operating as T-Mobile, the company would have about $74 billion in annual revenue and 70 million wireless subscribers. Verizon is the largest U.S. carrier with $88 billion in 2017 wireless revenue and 111 million subscribers, and AT&T would be No. 2 with $71 billion in wireless revenue and have 78 million regular subscribers.
Derived from the following combination, naturally.
well at least it looks like we got best case scenario with Ledgere remaining CEO. figure it’ll be like the original iPhone days where the unlimited data folks got grandfathered in until they figured out a way to jack their rates. They’ll probably make us pay more for 5G.. they’ll get us somehow eventually.