US telecom companies T-Mobile and Sprint to merge

T-Mobile US and Sprint are merging into the American company New T-Mobile, both companies have confirmed after rumors about this. Deutsche Telekom will receive the majority of the shares as part of the transaction.

The merger involves a $26 billion share swap. Deutsche Telekom will own 41.7 percent of the joint venture, Softbank, owner of Sprint, will take 27.4 percent. In addition, 30.9 percent of the shares of ‘New T-Mobile’ are publicly tradable. The current CEO of T-Mobile USA, John Legere, will become the CEO of the company.

One of the goals is to be able to quickly offer a nationwide 5G network in the US. In addition, the merger should provide lower prices and better services, according to T-Mobile US and Sprint. In terms of revenue and number of customers, T-Mobile is the third largest telecom provider in the US, Sprint the fourth. The merger will create a telecom company with 127 million customers and with AT&T and Verizon as major competitors.

The companies expect to complete the merger in the first half of 2019. The US telecom watchdog FCC still has to approve the transaction. T-Mobile and Sprint expect the authorities to agree, because the merger would lead to more competition, innovation, economic growth and jobs.