The wireless carriers field is already controlled by a few companies, now it could be controlled by even fewer. T-Mobile and Sprint have recently announced that they plan to merge. However, this merger will first need to be approved by the companies’ shareholders and regulators.
The merged company will be called T-Mobile and will be located in Bellevue, Washington. John Legere, the current T-Mobile CEO will be in charge of the merged company and Mike Sievert, the current COO of T-Mobile will be the new company’s president and COO. Deutsche Telekom, T-Mobile’s current majority owner will have about 42% of shares while SoftBank will have about 27%. The rest of the shares will be held by public stakeholders. SoftBank CEO Masayoshi Son and Sprint CEO Marcelo Claure will be on the merged company’s board.
The decision came to merge the companies because they believe it will decrease the price and they will be able to use the advantage of “greater economies of scale.” Both of these companies have fell behind the bigger rivals, Verizon and AT&T, and this merger will allow T-Mobile and Sprint gain ground and begin introducing 5G networks around the country. The merged company will have a reach of about 100 million customers.
This merger has been long awaited as it has been talked about for many years. Spring were prepared to purchase T-Mobile back in 2014 but that did not fall through. Those talks were resumed again May 2017 and were close to reach a deal but Sprint decided pull out last minute. And again, T-Mobile made an individual offer back in November but that also collapsed quickly. Finally after many attempts, the merger was reach to about $26 billion.
Even thought Sprint and T-Mobile have reached in agreement, the toughest part is about to come. Regulators must first clear this deal knowing that there are already very few mobile carriers.