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T-Mobile and Sprint merge in £18.9bn deal with ambitions to lead 5G deployment in America

Paul Lipscombe
April 30, 2018

The merger will see thousands of new jobs created and a heavy focus on rolling out 5G

T-Mobile and Sprint has announced a merger deal worth £18.9 billion ($26 billion) as the two telecoms companies look to compete with the AT&T and Verizon and focus heavily on 5G deployment.

The new firm will continue to use the T-Mobile name and will have a combined value of £106 billion ($146 billion).

Negotiations had been ongoing for months between Deutsche Telekom, who are T-Mobile’s main shareholder and Japanese-backed SoftBank who control Sprint. The merger will see Deutsche Telekom holding 42 per cent of the company with Sprint holding 27 per and cent and the remaining 31 per cent by the public.

As a result of the merger, the customer base will increase to around 130 million, made up of around 72.6 million US based T-Mobile and 54.6 million Sprint customers, which will allow it to compete with the big two AT&T and Verizon. In 2014 the companies were denied a chance to merge as the Obama administration regulators wouldn’t allow it.

John Legere, the current CEO and boss of T-Mobile will be at the helm of the newly formed company and has promised thousands of new jobs.

Welcoming the deal, Legere said: “I’m excited to announce that T-Mobile and Sprint have reached an agreement to come together to form a new company – a larger, stronger competitor that will be a force for positive change for all US consumers and businesses.”

With the two merging, the main focus is the drive towards the deployment of 5G as the new T-Mobile look to get ahead of the market in this and accelerate 5G in America.

Legere said: “Global tech leadership for the next decade is at stake and only the new T-Mobile will have the network and spectrum capacity to quickly create a broad and deep 5G network in the first few years of the 5G innovation cycle.”

“It is absolutely imperative that the US extends the global innovation, technology and economic leadership it seized during the 4G era. It is easy to forget now, but the 4G revolution unleashed innovation that led to the modern economy we interact with everyday.”

When discussing potential new jobs Legere added: “From day one, the new T-Mobile will always have more US employees on payroll than both standalone companies. Last year we added 27,000 jobs associated with our growth. And there’s no reason we can’t grow at the same rate.”

“We’ll build hundreds of stores and hire thousands of people to compete in rural America.”

Sprint CEO Marcelo Claure commented further on the new jobs, adding: “This merger will create jobs and boost the US economy, as the combined company will invest approximately $40 billion (£29 billion) over the next three years.”

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