Economy

Sprint $26B deal: CEOs call FCC chair open-minded

Sprint $26B deal: CEOs call FCC chair open-minded

The T-Mobile-Sprint deal would unite the U.S.'s third and fourth largest wireless carriers.

We went through this last fall, when the two companies came very close to tying up.

"We are going to have an impact on America", John Legere, the T-Mobile boss who will serve as chief executive officer of the combined entity, said on a conference call on Sunday.

Another goal is for the company to use the extra muscle and be the first to develop a 5G data network. The US is not the four-operator market at present.

5G is expected to create 3 million new U.S.jobs and $500 billion in economic growth by 2024, according to a report from CTIA.

Consumers will be the losers if T-Mobile and Sprint are allowed to merge, said Gigi Sohn, a fellow at the Open Society Foundations and former aide for the Federal Communications Commission (FCC). Executives of both companies have previously said that they would offer such service across the country and that their networks would be the best in the industry.

T-Mobile officials say they want to maintain a second headquarters here but that jobs can't be guaranteed.

So Sprint and T-Mobile are pitching their combination as a guarantee of American 5G leadership. The initial press release was obviously crafted with securing regulatory approval the primary mission, because the Department of Justice is certain to be interested.

Further, the MoffettNathanson analysts wrote that the Herfindahl-Hirschman Index (HHI), which measures competition in a given industry, now sits at 2,500 in the wireless industry, before the merger. The Chinese government launched a plan targeting 5G deployment by 2020, with three carriers committed to the timeline. But Legere and Claure now seem more comfortable jabbing rivals AT&T and Verizon instead. Brian Hart, a spokesman for the FCC, declined to comment. Young states that Verizon is focused on providing their customers with a reliable network while building the first Ultra-Wideband 5G network in the world.

More news: BB&T Securities LLC Cuts Position in Toll Brothers (TOL)

SoftBank Group, the controlling shareholder of Sprint, would own about 27 percent of the new company, with the remainder owned by the public.

T-Mobile and Sprint's proposed deal involves T-Mobile exchanging 9.75 Sprint shares per unit of T-Mobile. Sprint shares closed on Friday at $6.50. T-Mobile also dropped, almost 6 percent to $60.72.

T-Mobile faces a similar challenge for different reasons. Sprint shares fell 17 percent to $5.65. In an all-stock deal worth $26 billion. But it's a heavy burden for Sprint and T-Mobile, as each will have to spread the costs over a smaller customer base.

T-Mobile has fared better than Sprint, even if it remains a distant third to Verizon and AT&T. Making 5G a reality according to the two networks.

Two of the largest mobile carriers in the USA are planning to team up in a merger worth $27 billion, in a move that could reshape the telecom industry.

The carriers repeatedly discussed a merger in recent years as a way to ease costs and compete with larger companies in a mature wireless market.

An afternoon recap of the day's most important business news, delivered weekdays.

This merger is the end result of years of conversations between the companies. Morgan Stanley also helped Deutsche Telekom, and Evercore advised T-Mobile's committee of independent directors. Now, this new deal is no slam dunk by any means. But while I can get LTE-A speeds in the city, it's nowhere to be found during the 35-mile commute.


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