Consumers, analysts react to Sprint, T-Mobile merger


In general, Sprint and T-Mobile may be hoping for a more favorable hearing from regulators this time around. Sprint and T-Mobile are both much smaller (in terms of subscribers) than Verizon or AT&T, but merging both together will create a new company that looks much more capable of competing with the bigger carriers.

T-Mobile CEO John Legere, who will lead the combined company, promised more innovation and a faster network. Rivals such as Verizon, AT&T and Comcast will have to respond, he said.

Legere accused Claure of ripping off T-Mobile and told him to "go back to the kiddie pool".

The industry had been under just such a quiet period until late April a year ago, when wireless carriers were bidding on airwaves that the FCC had purchased from television stations willing to move to new signals or go off the air. T-Mobile has a large spectrum of lower-band airwaves that can cover greater distances, while Sprint has the largest USA spectrum of high-band radio waves that can handle more volumes of data but have limited reach. The remaining shares in both of the American companies are now in free float. Sprint was valued at $26 billion based on its last closing price, and T-Mobile was last valued at $55 billion. Deutsche Telekom, T-Mobile's parent, would own about 42 per cent of the combined company. Claure will serve on the board of the merged company, along with SoftBank Group chairman and CEO Masayoshi Son.

Deutsche Telekom rose 1.3 percent to 14.74 euros at 9:22 Frankfurt on Monday. Sprint shares closed on Friday at $6.50.

The companies say merging will allow them to lower prices and put more pressure on Verizon and AT&T.

Legere said that the new company will be the "ONLY company with the capacity to quickly create a broad and deep nationwide 5G network".

The new company will be headquartered in Bellevue, Wash., with a second headquarters at Sprint's headquarters in Overland Park. Sievert said the combined worldwide workforce of about 240,000 employees will increase once the merger is complete.

Regulatory hurdles and disputes over control of a combined organization halted previous merger discussions. T-Mobile is going to be even BIGGER & BETTER than you ever imagined!

They also emphasized that the deal would help accelerate their development of faster 5G wireless networks and ensure that the US doesn't cede leadership on the technology to China.

"All the stars have aligned", Marcelo Claure, Sprint's chief executive, said in an interview.

"While we couldn't reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination".

Obviously, the number of nation-wide carriers going from four to three means less competition.

T-Mobile and Sprint have been considering a combination for years.

The tie-up would position the telecom companies as fiercer competitors to Verizon and AT&T, which have long dominated the United States market. Service providers are preparing to spend billions to expand their so-called 5G infrastructure, money that Sprint and T-Mobile are harder pressed than the competition to spend.

The Trump administration, widely considered to have embraced a business-friendly approach, has also sued to block a proposed $85 billion deal by AT&T to buy Time Warner.