T-Mobile (TMUS) and Sprint (S) decided to merge for $59 billion, including debt, in April 2018 and form a new entity “New T-Mobile.” The merger would help the companies grow their customer base, expand their 5G network, and fight competition from telecom peers and online streaming giants like Netflix and Amazon. However, the deal hasn’t been approved due to regulatory hurdles.
At the end of March, T-Mobile had ~80 million customers, while Sprint had ~55 million customers.
Conditions to get merger approval
T-Mobile and Sprint have already pledged to divest their prepaid wireless asset, Boost Mobile, to fulfill the FCC’s (U.S. Federal Communications Commission) requirement for the $26.5 billion merger. On May 20, the FCC said that it wants the companies to deploy 5G in maximum rural areas. The companies will maintain low prices for three years after the merger deal closes.
However, the companies are still awaiting approval from the Department of Justice. T-Mobile and Sprint might divest their wireless spectrum to win antitrust approval and push the merger through.
According to some consumer advocates, if the merger is approved, it will likely reduce the country’s four wireless carriers to three and increase the prices for wireless users. Therefore, the advocates want the companies to create another carrier to maintain healthy competition.