Business
12:09, 30-Apr-2018
$26 bln T-Mobile, Sprint merger set to give US 5G boost
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T-Mobile US Inc and SprintCorp said on Sunday they had agreed to a 26-billion-US-dollar all-stock deal and believed they could win over
skeptical regulators because the merger would create thousands of jobs
and help the United States to a stronger position in building the next generation
mobile network.
The agreement capped four years of on-and-off talks
between the third and fourth largest US wireless carriers, setting
the stage for the creation of a company with 127 million customers that
will be a more formidable competitor to the top two wireless players, Verizon
Communications Inc and AT&T Inc.
US regulators, who have challenged
in court AT&T's 85 billion US dollar deal to buy US media company Time Warner
Inc, are expected to grill Sprint and T-Mobile on how they will
price their combined wireless offerings.
The new deal will
create the highest-capacity US network, lower prices, create jobs and
improve service in rural areas, said John Legere, the chief executive of
T-Mobile and the new head of the proposed combined company.
The combined
company, which will be called T-Mobile, will invest 40 billion US dollars over the next
three years to upgrade its networks to accommodate the next generation 5G
wireless technology, which is expected to have the speeds necessary
to power drones and self-driving cars, Legere said in a statement.
The
companies said during a conference call with analysts that the recent US tax overhaul would have a positive impact, and the combined company would not
be a significant taxpayer until 2025.
T-Mobile and Sprint said they
expected to complete their deal no later than the first half of 2019, an
ambitious goal given the intense US regulatory scrutiny it will be
subjected to.
CTIA, a trade organization that
represents the US wireless communications industry, ranks the United States
behind China and South Korea in 5G readiness.
The Chinese government has launched a plan targeting 5G deployment by 2020, with three
carriers (China Mobile, China Unicom and China Telecom) committed to the timeline.
Read More: China's 5G Development
Source(s): Reuters