The number of major wireless operators in the United States could be reduced from four to three. Sprint and T-Mobile have announced that they intend to merge. The merger must be approved by the regulators and the shareholders of the company.
The combined company will be based in Bellevue Washington and will be called T-Mobile. The current CEO of T-Mobile, John Legere, will lead the combined company, while T-Mobile's director of operations, Mike Sievert, will become the new COO and president of the company. The majority owner of T-Mobile, Deutsche Telekom, will have a 42 percent stake in the company, while Sprint's majority owner, SoftBank, will hold 27 percent. Sprint CEO Marcelo Claure and SoftBank CEO Masayoshi Son will be part of the combined company's board of directors.
Companies say that by combining, they will be able to lower prices and take advantage of "greater economies of scale". The two companies have followed their larger rivals, AT & T and Verizon, and the merger between Sprint and T-Mobile will help propel them as they begin deploying their next generation of 5G networks across the country.
The merger follows years of intermittent conversations between the two companies. Sprint had been prepared to buy T-Mobile in 2014, but those conversations did not go anywhere. The two companies resumed these talks in May last year, approached in September to reach an agreement, only for Sprint to suspend them in October. T-Mobile then made its own offer in November, but that also quickly collapsed. The talks resumed again earlier this month, and on Friday, CNBC said the two were approaching a merger in the amount of $ 26 billion.
While the two companies have agreed to merge, they still have an uphill battle before it actually happens: the deal will have to be approved by regulators, who may not be happy with the least number of operators. In 2011, a planned merger between AT & T and T-Mobile attracted fierce resistance from regulators, and was eventually canceled.