Bloomberg reports Deutsche Telekom AG, the Bonn, Germany-based company that controls T-Mobile, and SoftBank Group Corp., the Tokyo-based owner of Sprint, agreed to a combination that values each Sprint share at 0.10256 of a T-Mobile share, the companies said in a statement Sunday. That ratio values Sprint at $6.62 a share based on T-Mobile’s Friday closing price of $64.52.
“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,” John Legere, the T-Mobile boss who will serve as chief executive officer of the combined entity, said in the statement. The changes will come faster than either company could do on its own, he said.
Operating as T-Mobile, the company would have about $74 billion in annual revenue and 70 million wireless subscribers. Verizon is the largest U.S. carrier with $88 billion in 2017 wireless revenue and 111 million subscribers, and AT&T would be No. 2 with $71 billion in wireless revenue and have 78 million regular subscribers.
T-Mobile’s Mike Sievert will be president and chief operating officer.
The deal will face heavy regulatory scrutiny because it reduces the wireless industry to three major competitors from four. The companies dashed a previous plan to merge in 2014 after meeting resistance in Washington. Regulators said that a four-competitor wireless market fosters more choice, price competition and innovation, which proved to be largely true.
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