T-Mobile, Sprint tout merger as way to win race to 5G

T-Mobile US Inc. is looking to get ahead of the evolution to 5G with a play that would see it absorb another major telecommunications player in Sprint Corp., effectively bringing the United States wireless market down to three national players. The $26.5-billion deal, which must still pass regulatory muster, would combine the two companies under the T-Mobile name and be led by the latter’s CEO, John Legere. The entity would have over 100 million wireless subscribers and be valued at about $146 billion, based on share prices as of Friday, according to a Sunday press release. The companies expect the deal to transform the competitive landscape by allowing them to deploy the first nationwide 5G network, invest in that network and its business to the tune of a planned $40 billion, and deliver lower prices, the release said. “The new company will be able to light up a broad and deep 5G network faster than either company could separately,” the release noted, adding it deployed nationwide LTE faster than top competitors Verizon Communications Inc. and AT&T Inc. and the combined companies are “positioned to do the same in 5G with deep spectrum assets and network capacity.” In fact, it set up a website at allfor5g.com to push that narrative, which includes multiple references to U.S. companies needing to compete against Asian players and win the global “race” to 5G. There had been two previous attempts to merge, the first time in 2014 during Barack Obama’s presidency and the second attempt last year, when there was a rift over how the leadership composition would look. The difference now, however, is the pace of 5G development and the impact of new president Donald Trump, according to an analysis by the Massachusetts Institute of Technology (MIT). “While the alliance could indeed be beneficial to efforts to build a new network, heralding 5G is likely more about pandering to the Trump administration’s worries that China could beat the US to 5G,” MIT’s Erin Winick wrote on Monday, citing Quartz. “And with Trump seen as more open to large corporate mergers,” Winnick continued, “the two companies are hoping that this time regulators will let it happen.” Despite this, a Monday report by Market Watch — using Canada as an example of a system with three major wireless players and reduced competition — said if the deal is approved, unlimited and other lower-priced plans in the U.S. could fall by the wayside, citing an analyst. It added there’s a “good chance” the deal will not pass the regulatory smell test.

T-Mobile, Sprint tout merger as way to win race to 5G

Brief | April 30, 2018

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T-Mobile, Sprint tout merger as way to win race to 5G

Brief | April 30, 2018

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