America’s Sprint and T-Mobile are currently ironing out final deal details that would bring together the third (T-Mobile) and fourth (Sprint) largest wireless carriers in the nation, creating a stronger competitor to Verizon Wireless and AT&T.
The merger likely to be announced with quarterly earnings at end of month could, theoretically, with their combined wealth of spectrum and network infrastructure assets lead to better coverage, although that could take years to settle out.
Reports say details of the yet to be finalized deal include leaving John Legere, T-Mobile U.S. Inc. chief executive, in the saddle, controlling the combined assets of his company and Sprint Corp.
Among the details still being worked out, according to reports, is Sprint’s valuation in determining an exchange ratio for the all-stock deal. Sprint shares closed Thursday at $7.50 in New York, valuing the company at about $30 billion. Majority owner SoftBank Group Corp. reportedly would accept a valuation around Sprint’s market price.
The companies are also continuing discussions around non-cash items, including the location of the combined entity’s headquarters and appointments to the executive management team, according to the report. The wireless carriers are pursuing the deal to bulk up against industry giants AT&T Inc. and Verizon Communications Inc.
The two companies have flirted with a merger before. Sprint’s parent, Japanese carrier SoftBank, tried to strike a deal with T-Mobile majority shareholder Deutsche Telekom back in 2014, but dropped its attempt when the government signaled that it favored four national competitors. The odds might be better now under a more business-friendly Trump administration.
Even as separate, smaller entities, both companies have made an impact on the industry over the last few years. T-Mobile eliminated contracts and phone subsidies and last year led the push to bring unlimited plans back to the industry in a bigger way. Sprint introduced the concept of a phone-leasing plan and this year began offering a year of its service for free
If approved by the American Justice Department’s antitrust division, the merger would reduce the number of national wireless carriers to three from four.
Frontpage September 19, 2019