CLOSE Both network carriers say this is a way to stay competitive in the race to have the fastest 5G network. If approved, Sprint will be absorbed into T-Mobile. USA TODAY

T-Mobile and Sprint signage. The two companies are reportedly in merger talks. (Photo: Justin Lane/Erik Lesser, EPA-EFE)

T-Mobile and Sprint are combining in a deal that would create a bigger No. 3 cellular carrier in the U.S., but could also signal the end of an era of aggressive competition for customers.

The merger, an all-stock deal announced Sunday after years of on-again-off-again courting, would create a company using the name T-Mobile. It would value Sprint at $59 billion and the combined companies at $146 billion, including debt. Excluding debt, the deal would value Sprint at about $26 billion.

T-Mobile and Sprint say their merger, if approved by regulators, would mean lower customer prices, greater innovation, more jobs and better wireless service, especially in the rural U.S. They also tout the deal as a way to best position the companies to compete in the forthcoming 5G race for faster mobile Internet. But critics worry that the merger will curb competition and result in job losses.

T-Mobile's stock price fell 6.22% Monday, and Sprint's slid13.69%, as worries about the deal's approval bubbled up on Wall Street.

Angelo Zino, an analyst with CFRA Research, puts the odds of regulatory approval at 50%, "at best," because "it will be difficult to prove fewer carriers will be good for consumers."

More: T-Mobile and Sprint merger could cool cell-phone wars, which have benefited customers

The new company, which would have more than 90 million retail wireless subscribers, still trails the top two carriers, with AT&T reaching 93 million subscribers, and Verizon 116 million.

"It's a very simple rule of business. Both companies need each other," said Sprint CEO Marcelo Claure told investors on a conference call Sunday. "The reason why this is going to work is that T-Mobile cannot do the 5G strategy without Sprint and Sprint cannot do it without T-Mobile."

An AT&T spokesperson declined to comment on the deal; Verizon did not respond to a similar USA TODAY request for comment.

New jobs or fewer jobs

The executives said the merger will result in thousands of new jobs right away, with the potential to create "tens of thousands" later. The merged company's plans to invest up to $40 billion in its new network and business in the first three years alone is a massive capital outlay that could fuel job growth across related sectors, too.

But analysts say job cuts are inevitable with so many business-function redundancies between T-Mobile and Sprint. These could number in the tens of thousands and call centers could take the heaviest brunt. The two companies employ more than 80,000 people.

The new company is expected to achieve $6 billion in synergies — redundancies between the two corporations, like sales, marketing, back office functions and customer service — says Roger Entner of Boston-based research firm Recon Analytics. But 93% of that figure is operating expenses and the majority of those operating expenses are people.

"Will they be able to (offset) these job losses with new hiring? How much will regulators hold their feet to the fire?" he said.

Lay-offs may become a focal point for opposition. Trump won the White House with a campaign steeped in promises to make life better for the American worker, and he twinned his sweeping 2017 tax cuts with vows of job creation.

Telecommunications workers aren't likely to allow the bigger company to cut jobs or reduce full time positions without a fight. Unions have been pressuring companies like AT&T to return some of that tax windfall to workers in the form of jobs returned to the U.S. from offshore centers and higher wages.

Sprint CEO Marcelo Claure speaks at a the National Council of La Raza Annual Conference Monday, July 13, 2015, in Kansas City, Mo. (Photo: AP Photo/Charlie Riedel)

Worse for consumers?

The deal also risks toning down the cycle of price cuts and improved features the wireless companies have engaged in for the last five years.

Gigi Sohn, a distinguished fellow at the Georgetown Law Institute for Technology Law & Policy, said the deal will mean fewer choices for customers and could prompt the three remaining companies to “act in concert.”

“Consumers will be the losers if T-Mobile and Sprint are allowed to merge,” said Sohn, who served as counselor to former Federal Communications Commission Chairman Tom Wheeler.

“Both companies have been feisty competitors to the two biggest national mobile wireless carriers, Verizon and AT&T," she said..

But Recon's Entner said worries about higher prices are over-blown.

"They’re really intense competitors. Prices will continue to decrease, but how soon will they decrease?"

The two companies executives argue that it's short-sighted to view the competition for customers as fight between phone companies. Cable and broadband companies like Comcast have rolled out their own wireless plans.

"Convergence between mobile broadband and cable isn't just a hypothetical. It's a reality of our business on a day to day basis," said T-Mobile CEO John Legere.

Should the companies merge, Sprint subscribers might see some new pricing arrangements available and could become eligible for T-Mobile promotions such as free Netflix subscriptions.

Those on T-Mobile might get Hulu or Tidal subscriptions in return, which Sprint has been promoting under some of its plans.

More: T-Mobile and Sprint merger could cool cell-phone wars, which have benefited customers

More: T-Mobile CEO: More competition in wireless and beyond in 2018

More: Justice Dept. investigating if AT&T, Verizon make it too hard to switch wireless carriers

Government blessing

The deal still requires regulatory approval and that step is far from assured.

The nation's No. 3 and No. 4 wireless carriers had tried to join forces before. In 2014, they considered merging but eventually called off talks because it was believed the hurdles under the Obama administration were too high.

T-Mobile's growth since then may factor against the new deal. Opponents are likely to argue that halting a merger of the two companies four years ago resulted in a stronger T-Mobile, with more benefits to customers.

Legere, who has aggressively promoted the T-Mobile brand on social media and television — frequently taking swings at rivals — has overseen a more than doubling of T-Mobile's subscriber base since joining the company in 2012. The company dropped a practice of requiring smartphone customers to sign on to onerous two-year contracts and was at the forefront of a return to unlimited data plans.

Sprint's owners have tried to clear the way. SoftBank CEO Masayoshi Son was one of the first technology leaders to throw his support behind Trump, meeting with the then-President-elect in December 2016 at Trump Tower. Trump then announced SoftBank Group planned to invest $50 billion into the U.S. economy and add 50,000 jobs.

The meeting rekindled speculation that SoftBank would renew talks between Sprint and T-Mobile efforts under a Republican administration. But a year later, negotiations between the two companies hit a wall. In early November, both companies said they officially ended merger plans saying they couldn't agree on terms.

If the third time proves a charm, Legere will remain CEO of the new T-Mobile. Marcelo Claure, who co-founded wireless company Brightstar and who was named Sprint CEO in 2014, will become a member of T-Mobile's board.

Mike Sievert, T-Mobile's current chief operating officer, will become president and COO of the new T-Mobile.

T-Mobile's parent company, Deutsche Telekom, would own 42% of the combined company. Sprint's parent, Japanese telecom titan SoftBank Group, run by Sprint chairman Son, would own 27% while the remaining ownership would be public.

Contributing: Eli Blumenthal and Mike Snider

Read or Share this story: https://usat.ly/2KpOCKb</s>NEW YORK (CNN) – T-Mobile and Sprint have finally agreed to a massive telecom merger after years of negotiations punctuated by two breakups.

The agreement would leave just three major wireless carriers in the United States and must clear antitrust regulators. The combined company, which will take on the name T-Mobile, would be positioned as a fierce competitor to Verizon and AT&T.

T-Mobile CEO John Legere, who will head the merged company, said on a conference call Sunday that the firm plans to deliver “the highest capacity network in US history.”

He said the company will hire thousands of people in a bid to create a nationwide network that will position the United States as the leader in providing 5G connectivity.

A recent report from research firm Analysys Mason suggests it’s China and South Korea, not the United States, that are currently leading 5G development.

The move combines the third and fourth largest wireless service providers in the nation. Sprint was valued at $26 billion based on its last closing price, and T-Mobile was last valued at $55 billion. The deal values Sprint near its latest closing share price of $6.50.

Andrew Schwartzman, an attorney who specializes in telecommunications and a professor at Georgetown Law, said he expects it will be “difficult” to get regulators to sign off on the merger.

Sprint and T-Mobile first discussed a merger in 2014 but scrapped it because of concerns about regulatory challenges from the Obama administration.

Schwartzman noted the deal was blocked because regulators determined that the wireless market could support four major players, and having them compete benefited consumers.

“It will be difficult to convince the Justice Department that circumstances have changed so much that it’s necessary to go down to three providers,” he said. “That’s the major hurdle that has to be confronted.”

The companies expected to have a better shot at the merger under the Trump administration.

Sprint stock tanks as T-Mobile merger said to collapse

SoftBank CEO Masayoshi Son met with President Donald Trump the month before he took office to talk up an investment in US businesses.

A few weeks later, T-Mobile’s Legere said he was open to “various forms of consolidation” when asked about a potential merger with Sprint and SoftBank under the Trump administration.

But last November, after much speculation, the two companies issued a statement saying they had “ceased talks.”

“While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination. However, we have agreed that it is best to move forward on our own,” Marcelo Claure, the Sprint CEO, said at the time.

Sprint and T-Mobile’s announcement is just the latest step in an ongoing movement towards telecom consolidation. AT&T is in talks to acquire Time Warner, which owns CNN. The outcome of that $85 billion merger-in-the-making depends on a case in federal court, which is pending the decision of the judge.</s>The boards of T-Mobile and Sprint have put the finishing touches on a massive merger agreement that values the combined company at $146 billion.

T-Mobile USA chief executive officer John Legere made the announcement by tweeting a seven-minute video breaking down the merger, also including a link to a website further explaining the combination.

Legere will be CEO of the newly combined entity, will keep the T-Mobile name, and have headquarters located in both Bellevue, Wash. and Overland Park, Kan.

The all-stock deal values Sprint at 0.10256 per T-Mobile share, or $6.62 a share, based on T-Mobile's last closing price. That valued Sprint at around $26 billion.

This story is developing. Refresh for updates.</s>The two wireless carriers announced plans Sunday to merge into a new telecom giant. But for consumer advocates and regulators, the big questions are: Will there be enough competition with one fewer national wireless carriers? And will prices go up?

Sprint and T-Mobile US, which announced Sunday they had reached a deal to merge into a new telecommunications giant, are betting that regulators will finally allow the U.S. wireless market to shrink to just three national players.

A combined company, they said, would have more than 100 million subscribers — and the resources to build out a next-generation wireless network and challenge the longtime market leaders, Verizon and AT&T.

Sprint and Bellevue-based T-Mobile also said the merged company — which would keep the T-Mobile name, be run by T-Mobile CEO John Legere, and have dual headquarters in Bellevue and Sprint’s hometown of suburban Kansas City — would create thousands of jobs by building out that next-generation network and opening hundreds of new stores in rural areas.

But for consumer advocates and regulators, the big questions are: Will there be enough competition with one fewer national wireless carriers? And will prices go up?

Sprint and T-Mobile have tried unsuccessfully to merge before. They were effectively blocked four years ago by regulators in President Barack Obama’s administration who worried that shrinking the market for wireless providers would give consumers fewer choices and lead to higher prices.

This time, the two companies have a very specific message for the Trump administration. A combination, they argue, would allow them to create a better so-called 5G network than either company could alone, at a time when the White House views a superfast 5G wireless network as crucial for the country’s economic and national security.

“All the stars have aligned,” Marcelo Claure, Sprint’s chief executive, said in an interview. He added that the deal “allows this company to offer the best product at better prices, lower prices.”

The heads of the two companies acknowledged that winning over regulators was a top priority. In an interview, Legere said that he and Claure planned to head to Washington this week. Legere added that they did not try to “presell” the transaction, although they said they had called officials at both the Federal Communications Commission and the Justice Department to inform them of the agreement.

Under the terms of the deal — the companies called it a merger but T-Mobile would effectively be buying Sprint for about $26.5 billion — T-Mobile’s controlling shareholder, Deutsche Telekom, would own 42 percent of the combined company. Claure would join its board.

SoftBank of Japan, which controls Sprint and whose founder, Masayoshi Son, has long dreamed of merging the two carriers, would own 27 percent. Public shareholders would own the rest.

Joining the country’s third- and fourth-largest mobile-service providers would be one of the most significant consolidations in the U.S. wireless market in years. A combined T-Mobile and Sprint, with almost 100 million retail subscribers as of Dec. 31, would put it ahead of AT&T, with 93.6 million, and not far behind Verizon’s 116.3 million.

It is unclear how hard Verizon and AT&T will try to fight the deal, if at all. A spokesman for AT&T declined to comment, while a spokesman for Verizon said in a statement that it was focused on building its own 5G network, “not just a proposal that may or may not happen in the next couple of years.”

Some Democratic lawmakers questioned the merits of the deal. Sen. Amy Klobuchar of Minnesota said in a statement, “I remain concerned that increased consolidation could undermine benefits to consumers.”

But Washington Gov. Jay Inslee tweeted that he welcomed news of potential job creation.

If the deal goes through, it’s likely some jobs would be cut as duplicate roles are eliminated. The companies’ executives didn’t deny that in a conference call Sunday, but they said that overall, thousands of jobs would be created by the merger.

The two companies have about 80,000 full-time employees combined, and that number will grow every year as the companies expand their networks and 5G technology, Mike Sievert, current T-Mobile chief operating officer and the planned president and COO of the combined company, said Sunday.

Nearly every merger leads to a reduction of sales and marketing teams, and T-Mobile’s headquarters in Bellevue, with 5,500 employees, would likely face such cuts, Chetan Sharma, an industry consultant based in Issaquah, said before Sunday’s merger announcement. But he said T-Mobile would be dominant in a combined company and deeper cuts were likely to come at Sprint’s headquarters.

T-Mobile and Sprint contend that the market has changed since they last tried to combine in 2014. Building out 5G requires tens of billions of dollars in investments that T-Mobile and Sprint, especially, would be hard-pressed to put up on their own.

And there are fresh competitors in the sector. Comcast, for example, has drawn hundreds of thousands of wireless-service customers by bundling mobile phones with cable plans, even if it loses money.

For consumer advocates, however, the chief worry is that a shrinking number of providers would end the innovations T-Mobile introduced to the U.S. wireless market since the Justice Department blocked its plan to sell itself to AT&T in 2011. Under Legere, T-Mobile cut prices, ended long-term contract requirements and promised to simplify customer bills by eliminating hidden fees and surprise taxes.

Those policies helped T-Mobile add nearly 40 million customers over the past five years, with 5 million new customers last year alone. AT&T, Verizon and Sprint all followed suit, and in recent years the overall price of basic wireless plans has stayed flat or fallen, according to Obama-era regulators.

“The success of the four-firm market is proven for consumers in lower prices and better offerings,” said Tom Wheeler, who was the chairman of the FCC when he opposed a merger between Sprint and T-Mobile in 2014. “It is hard to see how removing the competition that created improves things for consumers.”

But analyst Craig Moffett, of the research firm MoffettNathanson, said the issue of what is best for consumers is not merely a question of numbers.

“Is it lower prices,” he asked, “or more availability of advanced consumer technology?”</s>T-Mobile and Sprint are forming a $146 billion new company John Legere, T-Mobile's CEO, is expected to serve in that role for the merged entity, which would retain the T-Mobile name. It's official: T-Mobile and Sprint have announced plans to merge, with a combined company valued at $146 billion.John Legere, T-Mobile's CEO, is expected to serve in that role for the merged entity, which would retain the T-Mobile name. The deal is likely to draw scrutiny from antitrust regulators, considering the Trump administration's treatment of AT&T and Time Warner's attempted merger. The boards of T-Mobile and Sprint have put the finishing touches on a massive merger agreement that values a combined company at $146 billion. T-Mobile's CEO, John Legere, made the announcement on Sunday by Deutsche Telekom, which owns two-thirds of T-Mobile, would control the newly formed company. I’m excited to announce that @TMobile & @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! Watch this & click through for details. — John Legere (@JohnLegere) April 29, 2018 Legere is expected to be the CEO of the combined entity, which would keep the T-Mobile name and have headquarters in Bellevue, Washington, and Overland Park, Kansas. The deal, which would combine the third- and fourth-largest US wireless carriers, is expected to come under serious scrutiny from antitrust regulators, as the Trump administration has The agreement marks the culmination of four years of on-again, off-again discussions between T-Mobile and Sprint; this is the third time the two rivals have tried to merge. With a combined 127 million customers, the two firms are expected to compete directly with "This isn't a case of going from four to three wireless companies — there are now at least seven or eight big competitors in this converging market," Legere said on Sunday. The agreement involves T-Mobile exchanging 9.75 Sprint shares per unit of T-Mobile. Deutsche Telekom would own 42% of the combined company, while SoftBank, which controls 85% of Sprint, would own 27%. The public would hold the remaining 31%. Sprint and T-Mobile discussed a deal in November, but talks broke down amid disagreement over who would control the new company. "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," Legere said in an Sprint's CEO, Marcelo Claure, added: "We intend to bring this same competitive disruption as we look to build the world's best 5G network that will make the US a hotbed for innovation and will redefine the way consumers live and work across the US, including in rural America." The all-stock transaction values Sprint at 0.10256 per T-Mobile share, or $6.62 a share, based on T-Mobile's latest closing price, for a total of about $26 billion. T-Mobile had a market value of $55 billion as of Friday's close, and the two companies have roughly $60 billion of combined debt. Sprint's stock has surged 26% since This article was originally published on [url= The agreement marks the culmination of four years of on-again, off-again discussions.The deal is likely to draw scrutiny from antitrust regulators, considering the Trump administration's treatment of AT&T and Time Warner's attempted merger. Sprint dropped by 13% in premarket trading on Monday, while T-Mobile slid 2.4%. Follow live trading on Markets Insider The boards of T-Mobile and Sprint have put the finishing touches on a massive merger agreement that values a combined company at $146 billion.T-Mobile's CEO, John Legere, made the announcement on Sunday by tweeting a seven-minute video breaking down the merger and linking to a website that further explains the combination.Deutsche Telekom, which owns two-thirds of T-Mobile, would control the newly formed company.Legere is expected to be the CEO of the combined entity, which would keep the T-Mobile name and have headquarters in Bellevue, Washington, and Overland Park, Kansas.The deal, which would combine the third- and fourth-largest US wireless carriers, is expected to come under serious scrutiny from antitrust regulators, as the Trump administration has fervently opposed AT&T's proposed mega-acquisition of Time Warner The agreement marks the culmination of four years of on-again, off-again discussions between T-Mobile and Sprint; this is the third time the two rivals have tried to merge.With a combined 127 million customers, the two firms are expected to compete directly with Verizon , the US's largest carrier, and AT&T "This isn't a case of going from four to three wireless companies — there are now at least seven or eight big competitors in this converging market," Legere said on Sunday.The agreement involves T-Mobile exchanging 9.75 Sprint shares per unit of T-Mobile. Deutsche Telekom would own 42% of the combined company, while SoftBank, which controls 85% of Sprint, would own 27%. The public would hold the remaining 31%.Sprint and T-Mobile discussed a deal in November, but talks broke down amid disagreement over who would control the new company. A Wall Street Journal report suggests that SoftBank's founder, Masayoshi Son, may have since become more willing to give up control amid mounting pressure on Sprint to roll out 5G technology."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," Legere said in an official statement Sprint's CEO, Marcelo Claure, added: "We intend to bring this same competitive disruption as we look to build the world's best 5G network that will make the US a hotbed for innovation and will redefine the way consumers live and work across the US, including in rural America."The all-stock transaction values Sprint at 0.10256 per T-Mobile share, or $6.62 a share, based on T-Mobile's latest closing price, for a total of about $26 billion.T-Mobile had a market value of $55 billion as of Friday's close, and the two companies have roughly $60 billion of combined debt.Sprint's stock has surged 26% since The Journal reported on April 10 that the two companies had rekindled merger talks, while T-Mobile's has risen 8% over the same period.This article was originally published on [url= LINK ]Business Insider. Copyright 2018.</s>OVERLAND PARK (dpa-AFX) - T-Mobile has reportedly signed a merger deal with Sprint. T-Mobile parent would control the combined company and T-Mobile President and CEO John Legere is expected to run the combined entity.



According to WSJ, T-Mobile will exchange 9.75 Sprint shares for each T-Mobile share. T-Mobile parent Deutsche Telekom will own 42% of the combined company and Sprint parent SoftBank Group will own 27%. The remaining 31% will be held by the public.



The all-stock deal would merge Sprint, which has a market value of $26 billion, with T-Mobile, which has a market value of $55 billion. The merger would create the No. 3 US cellular carrier, behind Verizon and AT&T, however, it could end the ongoing competitive pricing.



Deutsche Telekom would also control voting rights over 69% and appoint nine of its 14 directors. The companies said they hope to close the deal in the first half of 2019.



T-Mobile has about 73 million subscribers and Sprint around 54 million, which compares to 141 million subscribers for AT&T and 162 million subscribers for Verizon.



Both the companies consider merger as the best way to go forward as it will help them be in a better position to compete with AT&T and Verizon in the forthcoming 5G race.



'It's a very simple rule of business. Both companies need each other. The reason why this is going to work is that T-Mobile cannot do the 5G strategy without Sprint and Sprint cannot do it without T-Mobile,' said Sprint CEO Marcelo Claure according CNBC report.



'Convergence between mobile broadband and cable isn't just a hypothetical,' said T-Mobile CEO John Legere. 'It's a reality of our business on a day to day basis.'



Copyright RTT News/dpa-AFX</s>
• T-Mobile will acquire Sprint in a deal that values the combined company at $146 billion.
• Current T-Mobile US CEO John Legere retain his role at the combined company, which will keep the T-Mobile name.
• Sprint tanked 12% as investors worried that the deal might not pass anti-trust scrutiny on the news, while T-Mobile US is down slightly.

Shares of Sprint fell as much as 12% in early trading Monday amid growing concern the wireless carrier's proposed its merger with T-Mobile in a deal that values the combined company at $146 billion may not pass regulatory scrutiny.

T-Mobile USA CEO John Legere made the announcement by tweeting a seven-minute video breaking down the merger, while also including a link to a website further explaining the combination. Germany's Deutsche Telekom owns two-thirds of T-Mobile, and will control the newly formed entity.

The announcement on Sunday marks the culmination of four years of on-again, off-again discussions between T-Mobile and Sprint — and was the third time the two rivals had tried to merge.

With 127 million customers between them, the two newly teamed companies are expected to compete directly with Verizon— the nation's number one carrier — and second-place AT&T. That's where the concern comes in.

For evidence that the deal which will combine the third- and fourth-largest US wireless carriers, is expected to come under serious scrutiny from antitrust regulators that, one need not look further than how fervently the Trump administration has opposed AT&T's proposed mega-acquisition of Time Warner.

In November, the US Department of Justice sued to block AT&T's proposed $84.5 billion takeover of the cable giant. President Trump himself said on the campaign trail in October 2016 that such deals would result in "too much concentration in the hands of too few," and "deals like this destroy democracy."

However, Sprint and T-Mobile face a different challenge. While AT&T's proposed merger was a so-called "vertical" deal, in that the two firms aren't direct competitors and the new company would be vertically integrated to combined film/TV production with distribution, T-Mobile and Sprint are direct competitors and consumers will have one less competitive choice if the deal goes through.

"I think it's very hard to imagine DOJ just giving this deal a pass, given how much it would increase concentration in key segments of the wireless market," Gene Kimmelman, former DOJ official and CEO of Public Knowledge, told Axios.

T-Mobile and Sprint's proposed deal involves T-Mobile exchanging 9.75 Sprint shares per unit of T-Mobile. Deutsche Telekom will own 42% of the combined company, while SoftBank — which controls 85% of Sprint — will own 27%. The remaining 31% will be held by the public.

Sprint's stock has surged 26% since the Wall Street Journal reported on April 10 that the two companies had rekindled merger talks. T-Mobile's stock has risen 8% over the same period.

The all-stock transaction values Sprint at 0.10256 per T-Mobile share, or $6.62 a share, based on T-Mobile's last closing price. That valued Sprint at around $26 billion. T-Mobile had a market value of $55 billion as of Friday's close, and the two companies have roughly $60 billion of combined debt.

Shares of Sprint are up 9% since the beginning of 2018, while T-Mobile is flat year-to-date.</s>T-Mobile and Sprint say they have agreed to a US$26 billion all-stock deal and believe they can win over skeptical regulators because the merger would create thousands of jobs and help the United States beat China to creating the next generation mobile network.

The agreement capped four years of on-and-off talks between the third and fourth largest U.S. 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 and AT&T.

U.S. regulators, who have challenged in court AT&T's US$85 billion deal to buy U.S. media company Time Warner, are expected to grill Sprint and T-Mobile on how they will price their combined wireless offerings.

Verizon has 116 million U.S. wireless customers, according to a spokesman, while AT&T has 93 million branded customers, as of the first quarter.

Their first round of merger talks ended unsuccessfully in 2014 after the administration of then-U.S. President Barack Obama expressed antitrust concerns.

The new deal will create the highest-capacity U.S. 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 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 U.S. 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 U.S. regulatory scrutiny it will be subjected to. T-Mobile will not be liable to pay Sprint a breakup fee should regulators block the deal, according to sources who asked not to be identified because that detail in their contract had not yet been made public.

The companies said they expected U.S. regulators would see the benefits of the deal.

“This isn’t a case of going from four to three wireless companies – there are now at least seven or eight big competitors in this converging market," Legere said, referring to cable companies as wireless competitors. Other companies also would be forced to accelerate their investments in the face of a combined T-Mobile-Sprint, the companies added.

A spokeswoman for Federal Communications Commission Chairman Ajit Pai declined to comment on Sunday on the proposed merger. The FCC will decide whether to grant the deal regulatory approval if it is in the “public interest,” the spokeswoman added.

CTIA, a trade organization that represents the U.S. wireless communications industry, ranks the United States behind China and South Korea in 5G readiness. The Chinese government launched a plan targeting 5G deployment by 2020, with three carriers committed to the timeline.

Legere said the deal would likely lead to lower prices from AT&T and Verizon, as well as Comcast.

AT&T declined to comment. Comcast could not immediately be reached for comment.

Verizon declined to comment on prices but said it remained committed to building a 5G network.

The breakthrough in the companies' negotiations came after T-Mobile majority-owner Deutsche Telekom and Japan's SoftBank, which controls Sprint, agreed on a structure that would allow Deutsche Telekom to continue to consolidate the combined company, which will have a market value of over $80 billion, on its books.

Deutsche Telekom will own 42 percent of the combined company, and will control the board of the combined company, nominating nine of the 14 directors. Legere will also serve as a director.

The implied equity valuation for Sprint is $6.62 per share based on T-Mobile's closing share price on Friday. Sprint shares closed on Friday at $6.50.

The all-stock transaction is at a fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share, or the equivalent of 9.75 Sprint shares for each T-Mobile US share.

Tokyo-based SoftBank and Deutsche Telekom will sign a voting rights agreement that will give Deutsche Telekom access to voting rights for a total of 69 percent of T-Mobile shares.

The second round of talks between Sprint and T-Mobile ended in November over valuation disagreements.

Since then, Sprint's shares lost about a fifth of their value amid questions about how the company can compete effectively under the weight of its long-term debt of more than $32 billion.

T-Mobile's market capitalization is $54.7 billion, while Sprint is valued by the deal at $26 billion.

Read more: NZ tech and telco sectors in the spotlight

Even though Sprint's customer base has expanded under CEO Marcelo Claure, growth has been driven by discounting. Analysts say that without T-Mobile, Sprint lacks the scale needed to invest in its network and to compete in a saturated market.

T-Mobile has fared better than Sprint, even if it remains a distant third to Verizon and AT&T. It has managed to score sustained market-share gains, as innovative offerings, improving network performance and good customer service attract new customers, according to Moody’s Investors Service Inc.

T-Mobile became the first major U.S. carrier to eliminate two-year contracts, a shift quickly embraced by consumers and copied by competitors. The company has also badgered rivals with its unlimited data plans.

Both Sprint and T-Mobile are far behind Verizon and AT&T in upgrading their network to accommodate next generation 5G wireless technology. Even after their merger, the combined company's budget to invest in 5G will be smaller than that of Verizon or AT&T.

Sprint and T-Mobile hope the deal will give them more firepower to participate in auction for spectrum to develop 5G. They plan to participate in a spectrum auction in late autumn and will request a waiver if the merger prevents the companies from participating.

PJT Partners, Goldman Sachs, Deutsche Bank and Evercore served as advisers for T-Mobile. The Raine Group, J.P. Morgan and Centerview Partners LLC advised Sprint.</s>The proposed deal could dramatically reshape the U.S. telecom industry while testing the appetites of consumers and regulators for further corporate consolidation.

T-Mobile US and Sprint, the nation’s third and fourth largest wireless carriers, announced a roughly $26.8 billion merger on Sunday that could dramatically reshape the U.S. telecom industry while testing the appetites of consumers and regulators alike for further corporate consolidation.

The deal marks the latest attempt by Bellevue-based T-Mobile, operated by Germany’s Deutsche Telekom, and Sprint, run by the Japanese conglomerate SoftBank, to combine forces as they seek to amass subscribers and challenge the national footprints of AT&T and Verizon, particularly at a time when the industry is racing to deploy the next generation of ultra-fast wireless technology, called 5G.

T-Mobile and Sprint have sought such a tie-up in the past, and much as before, they could face tough regulatory scrutiny in Washington, D.C. Federal officials have repeatedly signaled that they believe that consumers are best served when there are at least four national wireless providers competing against one another, not three.

This time, though, executives for Sprint and T-Mobile aim to convince regulators in the Trump administration that offering 5G wireless service around the country — a network for everything from smartphones to internet-enabled cars and other technologies — will require more resources than either of them could sustain individually.

“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, the chief executive of T-Mobile, in a statement. Under the newly announced merger, Legere would serve as leader of the combined 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 said.

If they complete their deal as proposed, a combination of T-Mobile and Sprint could unseat AT&T as the country’s second-biggest wireless provider. The new firm would have roughly 100 million customers, more prepaid and postpaid subscribers in the United States than AT&T’s 93 million. And it would put the newly formed wireless giant within striking distance of Verizon’s customer base of 116 million.

“Telecom is a scale business,” said Blair Levin, a policy adviser for the analysis firm New Street Research. “There are huge advantages of scale, and T-Mobile and Sprint have been carrying the cost of a network over a much smaller number of customers.”

Yet the companies must overcome myriad political hurdles — including consumers’ heightened skepticism about the rapid pace of consolidation in the media and telecom industries. From President Donald Trump to Sen. Elizabeth Warren, D-Mass., policymakers recently have sounded out against these deals and may train their fire soon on T-Mobile and Sprint’s latest gambit.

For years, T-Mobile and Sprint had flirted with such a combination, only to abandon their plans because of political troubles or boardroom squabbles. Notably, in 2014, Sprint dropped an attempt to acquire T-Mobile after the Obama administration hinted it would be likely to block the merger because eliminating a rival would be bad for competition. Those same concerns thwarted AT&T’s own plan to acquire T-Mobile in 2011.

The Federal Communications Commission and the Justice Department — which will review the newly formalized merger to ensure it protects consumers and competition — declined to comment. T-Mobile and Sprint said they expect the deal to close by the first half of 2019.

But some analysts say the government’s argument for opposing such a merger in 2014 since has proven correct. Preventing consolidation paved the way for T-Mobile to launch its Uncarrier campaign to reshape the wireless industry, said Craig Moffett, a telecom analyst at the research firm MoffettNathanson. The result has been lower prices and more consumer-friendly business practices, such as the end of long-term customer contracts.

“The DOJ’s decision to block the transaction has been validated in every conceivable way,” Moffett said. “T-Mobile has not only survived – it has thrived. The market has become more competitive. Consumers have unambiguously benefited from the DOJ’s decision. That poses a problematic backdrop for this merger.”

For Sprint, the troubles have been more acute, not the least because it holds considerable debt. Combined, though, the two wireless companies are bound to argue they’re better positioned to deploy the infrastructure necessary to power 5G. They already have pledged to invest $40 billion in their network in their first three years after merging.

Cost-savings from the merger could amount to $64 billion, according to some analyst estimates. Meanwhile, T-Mobile and Sprint are poised to cite recent efforts by the cable industry to launch nascent wireless products, such as Comcast’s Xfinity Mobile, as evidence that the marketplace has changed — and new competitors are on the scene — in recent years.

“This isn’t a case of going from 4 to 3 wireless companies – there are now at least 7 or 8 big competitors in this converging market. And in 5G, we’ll go from 0 to 1. Only the New T-Mobile will have the capacity to deliver real, nationwide 5G,” Legere said in a statement.

Another wild card may be Sprint’s and T-Mobile’s foreign ownership. In 2013, SoftBank invested $21.6 billion for a 72 percent stake in Sprint. Its chief executive, Masayoshi Son, has since increased Softbank’s stake to roughly 85 percent.

But the White House has frequently taken aim at mergers involving foreign companies. Broadcom – a chip manufacturer that was based in Singapore until this month, when it relocated to Delaware – was forced to abandon its takeover of the U.S.-based chipmaker Qualcomm, over concerns that it could give China an edge in the development of 5G networks.

Trump has also opined on other companies in the telecom and media industries that are seeking deals. He famously attacked AT&T’s proposed purchase of Time Warner during the 2016 campaign, for example, citing the deal as an example of too much power “in the hands of too few.” The Justice Department is wrapping up its trial to block that $85 billion merger, and a court decision is expected in the coming weeks.

Although much of the staff at Justice and the FCC has not changed since the Obama administration, the 2016 election brought new leadership to the agencies who might find T-Mobile and Sprint’s arguments persuasive, Levin said.

But the two companies’ promises, particularly on 5G, require regulators to “guess” what may happen next at the expense of competition, said Tom Wheeler, who was chairman of the FCC when AT&T was pursuing T-Mobile in 2011.

“The Trump FCC has seldom met a corporate proposal they don’t like,” said Wheeler. “The Trump FCC seems to say, ‘It’s corporations first, and consumers second.’ This is something that is going to benefit the companies and there is no proof that it will benefit consumers.”</s>WASHINGTON — T-Mobile and Sprint finally agreed to a massive telecom merger after years of negotiations punctuated by two breakups.

The $26 billion merger, announced Sunday, values Sprint near its current share price of $6.50.

The tie-up would position the telecom companies as fiercer competitors to Verizon and AT&T, which have long dominated the US market.

“I’m excited to announce that @TMobile & @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! Watch this & click through for details.” said T-Mobile CEO John Legere, in a tweet Sunday.

A report that the deal was getting close drove up Sprint’s stock price by 8% on Friday and T-Mobile’s price edged up as well. The stock price for SoftBank, a Japanese conglomerate with a majority stake in Sprint, rose by 3%.

Sprint and T-Mobile first discussed a merger in 2014 but scrapped it because of concerns about regulatory challenges from the Obama administration.

The companies expected to have a better shot at the merger under the Trumpc administration.

Sprint stock tanks as T-Mobile merger said to collapse

SoftBank CEO Masayoshi Son met with Trump the month before he took office to talk up an investment in US businesses.

A few weeks later, T-Mobile’s Legere said he was open to “various forms of consolidation” when asked about a potential merger with Sprint and SoftBank under the Trump administration.

Related: T-Mobile and Sprint break up, again

But last November, after much speculation, the two companies issued a statement saying they “have ceased talks.”

“While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination. However, we have agreed that it is best to move forward on our own,” Marcelo Claure, the Sprint CEO, said at the time.

Sprint and T-Mobile’s announcement is just the latest step in an ongoing movement towards telecom consolidation. AT&T is in talks to acquire Time Warner, which owns CNN and CNNMoney. The outcome of that $85 billion merger-in-the-making depends on a case in federal court, which is pending the decision of the judge.
T-Mobile US and Sprint agree to merge in a deal valued at US$146 billion. The merger is subject to approval from regulators.