Wireless carrier T-Mobile U.S. announced an agreement to buy the assets and operations of Sprint Corp., in an all-stock transaction worth about $26 billion.
The new company will operate as T-Mobile. The transaction is expected to close no later than the first half of 2019. The new T-Mobile will have some of the most iconic brands in wireless — T-Mobile, Sprint, MetroPCS, Boost Mobile, Virgin Mobile — and will determine brand strategy after the transaction closes.
The terms of the transaction did not disclose what will happen in Puerto Rico, where late last year, Sprint completed a joint venture with Open Mobile, as this media outlet broke in January 2017. Both brands still remain in the market, but one could disappear if T-Mobile decides to pull Sprint out of the deal reached with Open Mobile.
The primary reason for the acquisition is to create a carrier capable of rapidly launching nationwide 5G service, and deliver “lower prices, unmatched value and greater competition in wireless, video and broadband.”
“The new company will be able to light up a broad and deep 5G network faster than either company could separately,” T-Mobile said in a statement issued late Sunday.
“This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience – and do it all so much faster than either company could on its own,” said John Legere current CEO of T-Mobile, will serve as CEO of the new company.
“As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf,” he added.
The combined company will have lower costs, greater economies of scale, and the resources to provide U.S. consumers and businesses with lower prices, better quality, unmatched value, and greater competition, they said in a joint statement.
“The combination of these two dynamic companies can only benefit the U.S. consumer,” said Sprint CEO Marcelo Claure, who after the deal closes serve on the board of the new company.
“Both Sprint and T-Mobile have similar DNA and have eliminated confusing rate plans, converging into one rate plan: Unlimited,” said Claure.
The New T-Mobile will employ more people than both companies separately and create thousands of new American jobs, the carrier vowed.
TRB to present recommendations to FCC
A few hours after the carriers made their announcement in New York, the Puerto Rico Telecommunications Regulatory Board confirmed it will be submitting its opinion about the transaction to the Federal Communications Commission.
TRB President Sandra Torres said the agency “will ensure fair and equitable competition in the local market to guarantee consumers quality services at reasonable costs.”
“As in other transactions, mergers or alliances, once we are officially notified we will look at the control of the market and express our position as a local regulator before the FCC, she said.
“We will also watch over the employees’ status, an issue that always arises in these transactions,” Torres added.