Sprint Corp and T-Mobile US Inc made the $26 billion deal to beat China in the mobile network industry.
They are going towards a merger that will offer thousands of Job opportunities. In addition, it will also help the US to give tough time to China.
The agreement caps 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 No.1 and No.2 wireless players, Verizon Communications Inc and AT&T Inc.
Companies said the merger would allow them to accelerate upgrading their networks to accommodate the next generation 5G wireless technology.
According to sources, T-Mobile and Sprint said they expected to complete their deal no later than the first half of 2019, an ambitious goal gave the intense US regulatory scrutiny it will be subjected to. T-Mobile will not be liable to pay Sprint a breakup fee should regulators block the deal.
The companies said they expect US regulators would see the benefits of the deal. Companies said the deal would likely lead to lower prices for competitors, including AT&T, Verizon, and Comcast Corp.
Investment in the 5G Technology
Even though Sprint’s customer base has expanded under CEO Marcelo Claure, growth has been driven by discounting. 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. In addition, its improving network performance and good customer service are also attracting new customers.
T-Mobile became the first major US 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 Verizon or AT&T’s. However, Sprint and T-Mobile hope the deal will give them more firepower to participate in an auction for spectrum to develop 5G. They plan to participate in a spectrum auction in late fall and will request a waiver if the merger prevents the companies from participating.