In the United States, it seems like the number of major wireless carriers could be shrunk from four to three due to the announcement of Sprint and T-Mobile merging to together. However, the merger will be to get approved by the regulators and the company’s shareholders.
As the reports suggest, after the combination of both of the companies it will be called T-Mobile and will be based in Bellevue Washington. Sprint’s CEO Marcelo Claure and Softbank CEO Masayoshi Son will sit on the combined company’s board while the Sprint majority owners Softbank will hold 27 percent, with public stakeholders holding the rest. However, Current T-Mobile CEO John Legere will run the combined company and T-Mobile COO Mike Sievert will become the new company’s COO and President. The majority owner T-Mobile’s Deutsche Telekom will hold a 42 percent stake in the company.
The main goal that both of the companies plan to pursue after combining is that they’ll be able to lower price and take advantage of greater economies of scales. Both of the companies have their larger vials, AT&T and Verizon, and the merge between both of the companies will give them a boost as they begin to establish their next-generation of 5G network across the United States.
The merger comes after years of on-and-off talks between the two companies. Sprint had been prepared to buy T-Mobile in 2014, but those talks didn’t go anywhere. The two companies resumed those talks in May of last year, came close in September to reaching a deal, only for Sprint to call them off in October. T-Mobile then made its own offer in November, but that quickly collapsed as well. The talks resumed again earlier this month, and on Friday, CNBC said that the two were closing in on a merger to the tune of $26 billion.
While the two companies have agreed to merge, they still have an uphill battle before that actually happens: the deal will have to be cleared by regulators, who might not be happy about the smaller number of carriers. In 2011, a planned merger between AT&T and T-Mobile attracted fierce resistance from regulators and was ultimately canceled.