Another U.S. phone carrier is likely to bite the dust as T-Mobile has just inked a deal to buy the nation’s fourth-largest carrier, Sprint. The $26-billion merger will lead to the creation of the highest-capacity network in the U.S., according to T-Mobile executives.
The two companies agreed to merge on Sunday, April 29. T-Mobile’s CEO John Legere will reportedly lead the new company, while T-Mobile will boost its network capacity by 30 times.
The deal currently awaits the regulatory approval, so it is unclear when the two telecom giants will become one. Both companies expect the merger to happen in the first half of next year.
The U.S. Department of Justice and the Federal Communications Commission (FCC) will have to green light the deal first. In 2011, the two regulators blocked a merger between T-Mobile and AT&T. In 2014, T-Mobile and Sprint walked away from a merger deal after they learned that the government would say no to it.
Both Companies Hopeful Trump Administration Would Green-light the Merger
It is worth noting that the previous mergers were blocked under the Obama administration. The current administration is interested in job growth and international competitiveness, two benefits the new T-Mobile-Sprint deal promises to bring.
Sources familiar with the talks said Sprint’s chief executive Marcelo Claure will hold a position on the newly created firm. Both companies eye a merger because it will speed up the implementation of the controversial 5G networking standard nationwide.
Smartphones that are compatible with 5G are expected to roll out in 2019. Claure explained that only the combined carrier could implement the new technology quickly. “What happens in the first few years of a new technology is crucial,”, he added.
The companies also promise to create more jobs in their call centers and 5G deployment. However, in most mergers, jobs are slashed as the new management kills off duplicative positions.
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