T-Mobile agrees $26b mega-merger with Sprint


FE Team | Published: April 30, 2018 14:14:52 | Updated: May 01, 2018 13:51:01


Smartphones with the logos of T-Mobile and Sprint are seen in this illustration taken September 19, 2017. Reuters/File

US telecoms giant T-Mobile has agreed to buy its rival Sprint in a $26 billion (£18.9 billion) deal.

The merger of America's third and fourth largest mobile carriers is designed to create a more competitive firm with about 130 million customers.

However, the deal is expected to attract regulatory scrutiny over its potential impact on customer prices.

T-Mobile boss John Legere said the new firm would spend $40 billion on building a 5G mobile network in the next three years.

"Together, we will build the highest-capacity mobile network in US history!! I'm talking 30X more capacity than T-Mobile today!!" he said in one of a series of Tweets.

It comes after months of negotiations between T-Mobile's controlling shareholder, Deutsche Telekom, and Japan's SoftBank, which controls Sprint.

Under the deal, Deutsche Telekom will own 42 per cent of the combined company and control its board. Softbank will hold a 27 per cent stake.

Mr Legere will lead the new firm which will take the T-Mobile name and have a market value of $146 billion.

Analysts say the combined company would have more clout to compete with the first and second biggest US telecoms firms, Verizon and AT&T, each of which have more than 100 million subscribers.

In particular, they say it would be better positioned for America's looming shift to next generation 5G mobile broadband technology.

They also believe that, without T-Mobile, Sprint lacks the scale needed to upgrade its network, reports BBC.

Competition concerns

Sprint and T-Mobile had been in talks about a potential tie-up since 2014, when the Obama administration scuppered a previous merger attempt over competition concerns.

Under the Trump administration, regulators have continued to challenge deals they believe could push up prices and are likely to scrutinise this latest takeover closely.

The US Justice Department is currently trying to block AT&T's deal to buy US media giant Time Warner for $85 billion, warning that "consumers all across America will be worse off" if it goes ahead.

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