T-Mobile and Sprint have officially announced their merger to form a single company which will be named T-Mobile, resulting in a $146 billion valued company with more than 200,000 people employed. Deutsche Telekom (T-Mobile parent) will have 42% of the ownership, while SoftBank (Sprint parent) will have 27%.
T-Mobile, with its 600MHz spectrum, will join hands with Sprint’s 2.5GHz spectrum to create a deeper and wider network capable of handling faster data speeds and better communication. The newborn company could very well skip to the forefront of 5G development in the United States, considering that the two ends of the deal will benefit from each other’s movement thus far. The combined effort will surely be one to reckon with on the market. As has been the case with 4G, where the United States led the network expansion pushing the bandwidth for higher speeds, the merger will could again put the country in limelight to lead the beacon light for the 5G era said to begin this year.
Each carrier will provide the other with what it needs and help set off any costs incurred while the two existed separately. The primary goal will be to make prices affordable for consumers, and provide reliable yet fast speeds to all Sprint and T-Mobile subscribers. The resulting merger will also make a big push for rural coverage expansion, providing more job opportunities to the people of the US. Over the next three years, the resulting company will invest $40 billion into the network.
Sprint CEO Marcelo Claure will become a board member of the new company. CEO of the old and new T-Mobile, John Legere, made a statement following the announcement.
“This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience – and do it all so much faster than either company could on its own. As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf.”
The joint company’s network is expected to deliver 15x faster speeds on average nationwide by 2024, with many customers experiencing up to 100x faster speeds compared to early 4G. This is incredible growth that could be very disrupting in the market if gone as planned. If all does go well, the merger will give AT&T and Verizon a real run for their money. The deal is expected to close by the first half of 2019.
I guess the report we heard a few weeks ago did mean movement was happening after all. We thought the merger talks were going to die again as had been the case many times over recent years, but no, not this time. After being discussed four times, T-Mobile and Sprint have come to agreement. Compromises were made and quite honestly, I’m surprised after we what we heard a few months ago regarding arguments over control.
I’m still in shock this merger is happening for multiple reasons. Despite T-Mobile and Sprint saying this will increase competition, I see the possibility of destruction. There is now one less cell carrier and one that could completely take over the market in a few years. Fewer options is not a good thing for competition to take place, nor is it good for consumers or the capitalistic economy that is the US. I’m surprised government officials might let this happen, as the implications it could have are substantial.
On another note, we still don’t know a lot of the smaller details. We don’t know exactly what will happen with the workforce’s, nor do we know how consumers will be effected in the long run. For now, things continue to operate as normal, but once the merger really goes into effect, consumers could see changes brought on.
While the result will be a better network, this will take time to achieve. Something this big does not happen overnight. It’s also surprising to me that T-Mobile will be the dominating result of the merger. Sprint is said to be phased out in favor of T-Mobile and Magenta everything. I know T-Mobile is doing well, but not too long ago, Sprint was America’s third largest US carrier behind AT&T and Verizon. Despite growth not coming close to T-Mobile, who continues to rapidly expand thanks to the whole ‘Un-carrier Movement,’ Sprint still sees gains and possesses a large handful of subscribers. It’s odd to me that T-Mobile is the one really coming out of this deal as the winner. When merger talks first began, it was the other way around, which was likely a reason for this deal taking so long.
The merger is enough to make the new T-Mobile network second behind only Verizon. Though, I’d be running scared if I was Big Red right now. Both AT&T and Verizon will have to rethink their strategy if they want to keep their respective customers, because Sprint and T-Mobile together will be a strong market force. We’ve been researching over the last few days, but there are more questions than answers right now. We’ll continue to update you on the progress and changes to expect, as the situation pans out.