Published On: Sun, Apr 29th, 2018

T-Mobile, Sprint confirm $26 billion mega deal

T-Mobile and Sprint put an end to years of speculation, today (29 April) announcing plans to merge in an all-stock transaction worth $26 billion.

The combined company will operate under T-Mobile’s moniker with a home base in Bellevue, Washington, and will be led by T-Mobile CEO John Legere. T-Mobile COO Mike Sievert will also stay on board (as president and COO of the combined entity), and additional members of the new management team will be selected from both companies during the closing period.

Masayoshi Son, current SoftBank Group chairman and CEO (owner of Sprint), and Marcelo Claure, current CEO of Sprint, will serve on the board of the new T-Mobile.

According to GSMA Intelligence, T-Mobile and Sprint are the third and fourth largest mobile operators in the US, respectively, with a market share of 19 per cent and 12 per cent. Verizon leads the market with a 36 per cent market share, followed by AT&T (30 per cent). Today’s news would therefore create a new number two mobile operator in the US.

In a statement, Legere claimed the deal 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.”

The combined entity will have a market value of $146 billion.

On Twitter, T-Mobile CTO Neville Ray said the combination of Sprint’s 2.5GHz holdings, T-Mobile’s 600MHz, and other spectrum assets will “create the highest capacity mobile network in US history”.

“This thing will be something that no one has ever seen,” he added on a press call, dubbing it “the mother of all networks”.

During the press call, Sievert said the combined network will have 85,000 macro sites and 50,000 additional small cells.

But the pair are aiming to get their hands on even more spectrum, noting they will seek a waiver from the Federal Communications Commission (FCC) to bid in the upcoming mmWave spectrum auctiontogether.

Sprint customers are expected to be transitioned to T-Mobile’s network over the next three years, Sievert said. He noted 20 million Sprint customers already have handsets compatible with T-Mobile’s network, and said the company will “aggressively” migrate CDMA voice subscribers to voice-over-LTE technology though handset upgrades. To minimise service disruptions, Sievert added the combined operator will maintain CDMA on 800MHz until customers are fully transitioned.

Legere cast the combination as a boost for both jobs and competition, stating the new company plans to hire thousands of new workers to staff its call centres and stores, and build its 5G network. T-Mobile also claimed the new company’s lower costs, greater economies of scale and additional resources will help it provide US consumers with lower prices and greater competition.

All told, T-Mobile said the combined company plans to invest $40 billion in its new network and business in the next three years, which it claimed will fuel job growth in turn.

But sceptics weren’t convinced.

GlobalData research director Avi Greegart pointed out on Twitter Legere’s talking points seemed designed to win over regulators, addressing fears around competition, jobs and US leadership on 5G. He added vertical mergers are typically designed to achieve cost savings – $6 billion in this case – which frequently translates to job losses.

Matt Wood, policy director at media advocacy group Free Press, also warned in a statement the deal could disproportionately impact low-income families and people of colour, whom he said frequently use mobile as their only home-internet connection and relied on competition between T-Mobile and Sprint to drive prices down.

Terrell McSweeny, a former member of the US Federal Trade Commission, in a separate Twitter post urged antitrust enforcers to review the deal with “careful scrutiny”.

Hurdles remain
The deal still faces an uncertain future in the hands of regulators in Washington.

The merger will need to be approved by the US Department of Justice (DoJ) as well as the FCC. Though the companies, which abandoned merger talks in 2014 after the head of the FCC signalled intent to block a deal, are likely hoping for a friendlier regulatory environment this time around, the Trump Administration hasn’t always proved supportive of large tie-ups.

In a surprise move, the DoJ late last year sued to block AT&T’s proposed deal with Time Warner, a so-called horizontal merger of companies competing in different markets. It remains to be seen whether it will prove any more receptive to a vertical merger of companies operating in the same space.

However, in a statement, Legere expressed confidence regulators will see the “compelling benefits” of the deal and wave it through.

If all goes well, the transaction is expected to close no later than the first half of 2019.

© 2018, Hallmarknews. All rights reserved. Reference and link to this site is required if you wish to reuse any article.

Reactions from Facebook

comments and opinions

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Most Shared

Recent posts

  • Why NNPC adopted contractors funding contract

    The Nigerian National Petroleum Corporation (NNPC) has explained why it has resorted to contractor-financing of its pipeline and other facilities development in recent times in the Industry. Delivering the Keynote speech at the Nigerian International Pipeline Technology and Security Conference (NIPITECS 2018) Tuesday in Abuja, the NNPC Group Managing Director, Dr. Maikanti Baru, stated that […]

  • Justice Kafarati explains why AMCON failed to recover N5.4trn debt

    The Chief Judge of Federal High Court, Abuja Division, Hon. Justice Adamu Abdu Kafarati, has said there is a need for judges in Nigeria to support the recovery efforts of Asset Management Corporation of Nigeria (AMCON) since the corporation was established as a central element of government’s response to financial crisis in the country.  Justice […]

  • Equity market extends positive sentiment by 0.18%  

    The Nigerian equity market had its second consecutive rally on Friday, gaining 0.18 per cent, buoyed by sustained buy pressure. Sustained positive trading pushed the All Share Index (ASI) up by 59.28 absolute points, representing a growth of 0.18 per cent, to close at 32,540.17 points. The market upturn was on the back of the […]

  •  Why Polaris Bank was set up to take over Skye Bank—NDIC

    FELIX OLOYEDE The need to ensure the safety of depositors’ funds propelled the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) to establish Polaris Bank to succeed just defunct Skye Bank. NDIC disclosed said this today in a released signed by its Mohammed Ibrahim Head, Communications and Public Affairs, and he promised […]

  • My Mandate Is To Deliver The Ecobank Brand Promise As Platform Of Choice In Nigeria – Akinwuntan

    The Managing Director, Ecobank Nigeria, Mr Patrick Akinwuntan has reaffirmed that his mandate in Nigeria is to grow the Ecobank brand by delivering it as a brand of choice. The bank Managing Director stated that Ecobank service will be available and within the reach of every Nigerian either in their homes or locality through any […]

  • Experts blame shareholders as CBN revokes Skye Bank’s license

    FELIX OLOYEDE The failure of Skye Bank shareholders to recapitalize the bank, which has been battling with acute liquidity challenges is responsible for the revocation of its operating license of Skye Bank by the Central Bank of Nigeria (CBN), experts have declared. Prof. Joseph Ajibola, former President, Chartered Institute of Banking of Nigeria (CIBN) opined […]

  • Bulls return to stock market, appreciates 0.33%

    By FELIX OLOYEDE The Nigerian equity market on Thursday trended upward, reversing the previous day’s negative sentiment. The bourse gained 0.33 per cent, propelled gains recorded in medium and large capitalized stocks with WAPCO setting the pace. The All Share Index (ASI) appreciated by 105.77 absolute points, representing a growth of 0.33 per cent to […]

  •  Elumelu Foundation to launch world’s largest digital platform for African entrepreneurs

    The Tony Elumelu Foundation has concluded all plans to launch the world’s largest digital platform for African entrepreneurs and the African entrepreneurship ecosystem –  TEFConnect. TEFConnect will officially be unveiled at this year’s TEF Forum, taking place on October 25, 2018, at Federal Palace Hotel, Lagos, Nigeria. Harnessing and building on the success of Africa’s […]

  • NNPC declares 46% trade surplus

    Nigerian National Petroleum Corporation (NNPC) has stated on Thursday  that it had trade surplus of about 46 per cent in oil sales in the month of April, 2018. NNPC Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, in a statement noted that the trade surplus which amount to N17.16 billion was part of the highlight […]

  • 2018 GTBank Fashion Weekend to hold in November

    Fashion enthusiasts all over the world will be treated to an unparalleled exposé of Africa’s finest in fashion at the 3rd edition of the GTBank Fashion Weekend, which is bid to hold between  November 10-11, 2018, The two-day event will bring together renowned fashion personalities from around the world and budding small businesses in the […]

  • NDIC hosts IADI Africa Regional Committee AGM

    The Nigeria Deposit Insurance Corporation (NDIC) will host the next edition of the International Association of Deposit Insurers (IADI) Africa Regional Committee (ARC) Annual General Meeting and Technical Assistance Workshop. The event which has been scheduled to hold at the Four Points by Sheraton Hotel, Lagos from September, 25th – 27th 2018, would be focusing on Financial […]

  • Ambode 2019: The godfather’s revolt

    By OBINNA EZUGWU As uncertainty continues to hover around the second term bid of Lagos State governor, Akinwunmi Ambode, following an alleged plot by the state’s political godfather, Senator Bola Ahmed Tinubu to hand the ruling All Progressives Congress (APC) ticket to the Managing Director of Lagos State Property Development Corporation (LSPDC), Mr. Babajide Sanwo-olu, […]

  • FG to generate N6bn from concession of 20 Silos

    The Federal Executive Council (FEC) on Wednesday approved the Concessioning of 20 out of its 33 Silos to private sector operators at the cost of N6 billion. The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, revealed this when he briefed State House correspondents on the outcome of the meeting of the Federal Executive […]

  • Insurance sector sell-off drags capital market down, loses 0.02%

    The Equity Market on Wednesday shed 0.02 per cent, reversing yesterday’s positive sentiment. The downturn was on the back of the massive sell-off in Insurance stocks among others, which dragged the All Share Index (ASI) down by 5.88 absolute points, representing a dip of 0.02%, closing at 32,375.12 points. The Market Capitalization also dipped by […]

  • Number of extremely poor continues to soar in Sub-Sahara Africa

    Although globally, extreme poverty has rapidly declined, the number of people living in extreme poverty is, however, on the rise in Sub-Saharan Africa, comprising more than half of the extreme poor in 2015, a new poverty estimates by the World Bank has shown. Forecasts also indicate that by 2030, nearly 9 in 10 extremely poor […]

  • MAN sets for 46th AGM as Jacobs bows out 

    The Manufacturer Association of Nigeria (MAN) has unveiled plans for its 46th Annual General Meeting and Manufacturers Annual lecture/Presidential Luncheon, which is scheduled for  September 26 and 27, 2018 in Lagos. The occasion will also see the outgoing President of MAN, Dr. Frank Udemba Jacobs end his 4-year tenure. The event will play host to […]