Yesterday, T-Mobile announced that they would be acquiring Sprint in an all stock deal. Sprint would be valued at $26.5B. The stated objective is to create a large enough company to have the critical mass needed for a nationwide 5G wireless rollout.
The agreement would leave just three major wireless carriers in the United States and must clear antitrust regulators. The move combines the third and fourth largest wireless service providers in the nation. The Department of Justice and Federal Trade and Federal Trade Commission are expected to be tough on any review. It is not a certainty that the deal will be approved.
According to John Legere, President and Chief Executive Officer of T-Mobile US, “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.”
But is the deal in consumers’ best interest? T-Mobile and Sprint will try to sell this as there really is no choice. According to the release:
Only the combined company will have the network capacity required to quickly create a broad and deep 5G nationwide network in the critical first years of the 5G innovation cycle – the years that will determine if American firms lead or follow in the 5G digital economy.
The details on the announcements can be found at: http://investor.t-mobile.com/file/Index?KeyFile=393237761 and http://newsroom.sprint.com/t-mobile-and-sprint-to-combine.htm