T-Mobile and Sprint are merging under the T-Mobile brand in a US$26.5 billion deal. The post-merger company will include 100 million customers and they say their combined efforts will create the first nation-wide 5G network.
The merger still needs to go through U.S. regulatory approval, and assuming the process is successful, T-Mobile CEO John Legere will run the combined company. Sprint CEO Marcelo Claure will serve on the company’s board.
T-Mobile said in a statement,
The combined company will have lower costs, greater economies of scale, and the resources to provide U.S. consumers and businesses with lower prices, better quality, unmatched value, and greater competition. The New T-Mobile will employ more people than both companies separately and create thousands of new American jobs.
The companies are saying they’ll build out the first true nation-wide 5G network in the United States, and based on their resources that’s totally possible. T-Mobile brings the 600 MHz spectrum they need, and Sprint has the 2.5 GHz spectrum.
T-Mobile and Sprint’s Wireless Spectrum Combo
Combining the two radio frequency spectrums fills in the holes in both company’s 5G infrastructure. Sprint’s 2.5 GHz frequencies allow for faster overall speed, but can’t travel as far through buildings. T-Mobile’s 600 MHz band overcomes that problem, making for a much more stable and reliable 5G service.
Using the two spectrums together will create a single network that works where ever T-Mobile has towers, regardless of how densely packed buildings may be. In other words, it doesn’t matter if you’re in a big city or small town because T-Mobiles 5G network should be equally reliable.
T-Mobile versus Verizon and AT&T
T-Mobile has been locked in third place behind Verizon and AT&T for total number of subscribers for years. Sprint lost that position to T-Mobile and has been stuck as the fourth largest carrier ever since.
Verizon had over 150.4 million subscribers during the fourth quarter of 2017, and AT&T had over 141.5 million. T-Mobile’s subscribers topped 72.5 million, while Spring came in over 53 million. Based on those numbers, the new T-Mobile will have about 126.2 million subscribers.
T-Mobile will still trail Verizon and AT&T after the merger, but will be in a much better position overall to compete with the big two.
The T-Mobile and Spring Long Term Relationship
The merger announcement didn’t come out of the blue, and the big question for the past few years has been when T-Mobile and Sprint would finally make the announcement. In 2014 it looked like they were close to reaching an agreement, but that didn’t pan out at the time.
Back in 2014, Sprint was still larger than T-Mobile, so it was John Legere’s company that was being bought. with the tables turned, it’s Sprint that’s getting purchased. Sprint CEO Marcelo Claure is fine with that, as is SoftBank (Sprint’s majority owner) CEO Masayoshi Son.
Now the two companies need to go through the standard regulatory approvals before anyone prints up new business cards. They expect to complete the process no later than the first half of 2019. Considering the combined company will still be the third largest cell service provider, it’s possible they’ll get the go-ahead from the U.S. government.