Both network operators say this is a way to stay competitive in the race for the fastest 5G network. If approved, Sprint will be integrated with T-Mobile.
T-Mobile and Sprint agree on a deal that would create a major US number 3 carrier in the US, but could also do so Signal end of an era of aggressive competition for customers.
The merger, announced in an all-stock deal Sunday after years of re-repurchasing, would create a company named T-Mobile. It would have sprint to $ 59 billion and the combined companies to $ 146 billion, including debt. Without the debt, the business would value Sprint with about $ 26 billion
T-Mobile and Sprint say their merger, if approved by regulators, would lower customer prices, increase innovation, create more jobs and better mobile service, especially in rural areas Areas that mean you would also praise the deal as a way to best position companies to compete for faster mobile Internet in the upcoming 5G race. Critics fear, however, that the merger will slow competition and lead to job losses.
The new company that has over 90 million retail wireless Subscribers, still the top two carriers, with AT & T reached 93 million subscribers and Verizon 116 million.
"It's a very simple rule of business, and both companies need each other," Sprint CEO Marcelo Claure told investors over a conference call on Sunday. "The reason this works is that T-Mobile will not be able to implement the 5G strategy without Sprint and Sprint without T-Mobile."
A spokesman for AT & T did not want to comment on the deal; Verizon did not respond to a similar USA TODAY request for comment.
New Jobs or Less Jobs
The executives said the merger earnings are immediately thousands of new jobs, with the potential to later " Tens of thousands "to create. The merged company's plans to invest up to $ 40 billion in its new network and business in the first three years alone represent a huge capital outlay that could boost employment growth in related sectors as well.
Analysts, however, believe that job cuts are inevitable with so many business redundancies between T-Mobile and Sprint. This could number in the tens of thousands and call centers could take the heaviest brunt. The two companies employ more than 80,000 people.
The new company is expected to generate $ 6 billion in synergies – redundancies between the two groups such as sales, marketing, back office functions and customer service – says Roger Entner, Boston research firm Recon Analytics. But 93% of this figure is business expenditure and most of these operating costs are people.
"Will they be able to compensate for these job losses through new hires? How much will regulators keep their feet in front of the fire?" he said
layoffs may become a focal point for the opposition. Trump won the White House with a campaign full of promises to improve life for the American worker, and he voiced his sweeping tax cuts in 2017 to create jobs.
Telecommunications workers are unlikely to allow the larger company to cut jobs or reduce full-time positions without a fight. Trade unions have urged companies like AT & T to return part of that tax money back to the workers in the form of jobs, which are returned from offshore centers and higher wages to the US.
Sprint CEO Marcelo Claure speaks at the National Council of La Raza's annual conference on Monday, July 13, 2015, in Kansas City, Mo. (Photo: AP Photo / Charlie Riedel)
The deal also runs the risk of weakening the cycle of price cuts and improved mobile operator functions over the past five years.
Gigi's son, a distinguished colleague at the Georgetown Law Institute for Technology Law & Policy, said the deal means fewer choices for clients and could cause the three remaining companies to "act together."
"Consumers will be the losers if T-Mobile and Sprint are allowed to merge," said Son, who served as an advisor to former Federal Communications Commission chairman Tom Wheeler.
"Both companies are feisty competitors to the two largest national mobile operators, Verizon and AT & T." She said .. 19659008] But Recons Entner said, worries about higher prices are exaggerated.
"They are really intense competitors, prices are going to keep going down, but how fast will they go down?"
The two company bosses argue that the competition for customers is called short of a battle between telcos: cable and broadband companies How Comcast Introduced Their Own Products
John Legere, CEO of T-Mobile, said, "The convergence between mobile broadband and cable is not just hypothetical, it's a daily reality."
Should companies merge, then Sprint subscribers will see some new pricing arrangements eligible for T-Mobile promotions such as free Netflix subscriptions.
Those on T-Mobile could receive Hulu or Tidal subscriptions in return, which Sprint has promoted as part of some of its plans.
More: T-Mobile CEO: More Competition in Mobile and Beyond in 2018
More: Judicial Department investigates whether AT & T, Verizon make it too difficult to switch mobile operators  Government blessing
The deal still requires the approval of the authorities and this move is far from assured.
3 and 4 mobile operators had previously tried to unify They considered merger but eventually closed the talks because it was believed the hurdles under the Obama administration were too high.
The growth of T-Mobile could then turn against the new deal. Opponents will probably argue that the cessation of a merger of the two companies four years ago has led to a stronger T-Mobile with more benefits for customers.
Legere, who has aggressively promoted – and often rivals – the T-Mobile brand on social media and television – has more than doubled since joining the company in 2012. The company has dropped a practice claiming smartphone customers to sign stressful two-year contracts and pioneered the return to unlimited data rates.
Sprint's owners have tried to clear the way. SoftBank CEO Masayoshi Son was one of the first technology leaders to offer his support to Trump when he met with the then designated president at the Trump Tower in December 2016. Trump then announced that the SoftBank group plans to invest $ 50 billion in the US economy and create 50,000 new jobs.
The meeting rekindled speculation that SoftBank would renew the Sprint-T-Mobile talks with a Republican government. But a year later, the negotiations between the two companies hit a wall. At the beginning of November, both companies declared that they had officially ended the merger plans because they could not agree.
If the third time is a charm, Legere remains CEO of the new T-Mobile. Marcelo Claure, co-founder of mobile communications company Brightstar, who was named CEO of Sprint in 2014, joins T-Mobile's board of directors.
Mike Sievert, T-Mobile's current Chief Operating Officer, will become president and COO of the new T-Mobile.
T-Mobile's parent company, Deutsche Telekom, owns 42% of the combined company. Sprint's parent company, the Japanese telecom Titan SoftBank Group, which is headed by Sprint Chairman Son, would own 27%, while the remaining ownership would be public.
Contribution: Eli Blumenthal and Mike Snider
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