After 2-Year Regulatory Maze, Sprint and T-Mobile Have Merged

John Legere is stepping down as T-Mobile's CEO

The combined company's subscribers still lag behind AT&T and Verizon. - Credit by T-Mobile
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Key Insight:

Sprint and T-Mobile have officially closed their merger, capping off a two-year regulatory journey that wound through several levels of the country’s legal system.

The $26 billion deal will bring the number of major wireless carriers in the United States to just three, despite antitrust challenges from the Justice Department and, more recently, lawsuits from a number of states that were struck down last month by a federal judge.

As part of the terms, T-Mobile CEO John Legere has stepped down from his role, as he had previously announced he would last year, but will remain on the board through June. T-Mobile president and COO Mike Sievert will take his place effective immediately. The new company will operate under the T-Mobile brand.

The deal comes on the cusp of the rollout of the next generation of wireless service, 5G, which is expected to eventually boost network speeds across the board by between 10 and 100 times. Regulatory agencies have extracted a host of promises from the combined company on how its own 5G network will look, including a commitment to reach 99% of the U.S. population within the next six years and hit certain speed thresholds for 90% of rural Americans.

The prospect of a more widely accessible high-speed network was a centerpiece of the pitch the companies made to regulators. They argued that the super high-frequency airwaves on which Verizon and AT&T are building their 5G networks are not feasible in less densely populated areas because they can only travel short distances and are easily disrupted. Sprint and T-Mobile have a combined pool of licenses to broadcast on more durable, longer distance waves, but they claimed neither would have the scale to build a competitive 5G network alone.

The combined company will still be smaller than either of its rivals, with around 126 million subscribers to AT&T’s 141 million and Verizon’s 150 million.


@patrickkulp patrick.kulp@adweek.com Patrick Kulp is an emerging tech reporter at Adweek.
Publish date: April 1, 2020 https://stage.adweek.com/brand-marketing/sprint-tmobile-officially-merged-two-year-regulatory-struggle/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT
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