A deal several years in the works may finally be happening if government regulators do not prevent the massive $26.5 billion merger of major wireless providers T-Mobile and Sprint.
T-Mobile CEO John Legere and Sprint CEO Marcelo Claure released a joint video message on Sunday promising benefits from the consolidation deal. The two pitched that the deal will contribute to putting America at the forefront of 5G network development, create thousands of new jobs, boost the economy, and bring more network options for rural Americans.
Claure explained the difference between 4G and 5G as the difference between black and white television and color television. Legere told viewers that only Sprint and T-Mobile together will have the “network and spectrum capacity to quickly create a broad and deep 5G network in the first few years of the 5G innovation cycle.” He said that other providers cannot do the same alone.
Legere said that the new company will be the “ONLY company with the capacity to quickly create a broad and deep nationwide 5G network.” He claimed that for Verizon and AT&T to build a nationwide 5G network, they need to either engage in a multi-year process to kick customers off of Long-Term Evolution (LTE) or build on a millimeter wave spectrum at a cost of $1.5 trillion.
The CEOs made the case that if America leads in 5G, this will bring “huge economic stimulus for the United States.”
The two CEOs spoke of going after customers in rural America as well as the large volume of business and government customers that currently patronize AT&T and Verizon. Claure stated that currently Verizon and AT&T have four times more business and government customers than Sprint and T-Mobile have combined.
The two also promised that the deal will create thousands of jobs. Legere offers T-Mobile’s merge with MetroPCS just five years ago as evidence.
Claure and Legere pledged that over the next five years, the combined company will invest $40 billion in business. Claure states that this will pressure competitors to invest more in wireless, video, and broadband.
Talks of a merger back in 2014 were quashed due to concerns that they could not overcome regulatory concerns according to CNN Money. Now the companies must convince the Department of Justice that consolidating and leaving the U.S. market with three primary wireless providers will not harm customers through decreased competition. Meanwhile, AT&T has been working to acquire Time Warner, owner of CNN.
Recently, the Trump administration killed a deal that would have allowed Broadcom’s hostile takeover of Qualcomm. In March, President Donald Trump ordered Broadcom to cease its attempts to purchase Qualcomm, citing national security threat of such a deal. Trump said he killed the deal on the Committee on Foreign Investment in the U.S.’s (CFIUS) recommendation to do so. CFIUS accused Singapore-based Broadcom of violating its orders and expressed concern that it would strip research and development instrumental in U.S. development of 5G.
Follow Michelle Moons on Twitter @MichelleDiana.
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