T-Mobile Signs Contract to Acquire Sprint for $26 Billion

T-Mobile and Sprint are amongst the top telecom operators in the American Telecom industry. Both the telcos are involved in merger talks for more than four years. After keeping the merger to just talks three times, T-Mobile and Sprint today announced the combining of business operations in the United States. With this merger, Deutsche Telekom is reinforcing its business in the United States. However, the regulatory approvals will surely come into play like they did with the AT&T and T-Mobile merger back in 2011. That said, this move brings down the total telecom operators in the United States to three from the earlier four players. T-Mobile has stated that they have signed a contract to acquire Sprint for $26 Billion. The value of the new company (enterprise value) is around $150 billion, with expected synergies with a net present value of some $43 billion.

tmobile-sprint-merger

The newly merged entity T-Mobile US will have around 127 million customers and revenue of around $76 billion, based on the expected figures for 2018. Verizon Wireless is currently the top telecom operator in the US with over 150 million subscribers followed by AT&T with 141.6 million subscribers as of Q4 2017.

For the unaware, Deutsche Telekom currently holds 62% of the shares in T-Mobile US. Softbank’s shareholding in Sprint accounts for around 83% of the company’s equity. The remaining shares in both of the American companies are currently in free float. On completion of the transaction, Deutsche Telekom will hold around 42% of T-Mobile shares. Softbank will have a 27% stake. The remaining approximately 31% of shares in T-Mobile US will be in free float.

As per the agreement between the companies, T-Mobile will take over all Sprint shares in a stock swap. For every 9.75 Sprint shares, the company’s shareholders will receive one new share in T-Mobile US. Furthermore, the number of T-Mobile shares issued will, therefore, increase from around 865 million to around 1.29 billion shares (based on fully diluted shares). T-Mobile also stated that there are no plans for an additional cash contribution. This means the transaction is designed in such a way that there is no cash outflow for any of the companies involved.

T-Mobile also stated that the merger would also help the firm to roll out 5G technology more quickly and better than the single entities. The merger will be posted in front of the regulators in the coming days.

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24 Comments on "T-Mobile Signs Contract to Acquire Sprint for $26 Billion"

 

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SpEeeED
April 30, 2018 2:34 pm 2:34 PM

With such small
150million subscriber base
Verizon has recovered it’s entire
Investment and earning profits nowwwwww….

Airtel with over 200million
Not recovered investment, still on bank loans and debts

Person.A
April 30, 2018 7:15 pm 7:15 PM

Verizon’s ARPU (Average Revenue Per User) hovers around $50 (?3330), while the same for Airtel is ?116. At the current ARPU, Airtel would need 4.3 billion (430.6 Crore) subscribers to match Verizon in terms of revenue, which is more than half of the world population. Even if that were possible, Airtel would be nowhere near as profitable as Verizon, due to corresponding rise in CapEx & OpEx to handle such a large no. of subscribers.

Pritam Das
April 30, 2018 5:49 pm 5:49 PM

Typical single line phone bill in USA is $70 per month. Want to add extra data? $10 per GB. Now convert that in INR. Jio is giving 2 GB every damn day for 3 months for $7. It’s a no brainer that ARPU over there is extremely healthy.

AU(Airtel User)
April 30, 2018 11:45 pm 11:45 PM

Not everyone uses those plans, there is prepaid option too whereas in india you have 30 crore with airtel and 20 crore with jio do the math.

dragonmonk
April 30, 2018 5:24 pm 5:24 PM

@speed Sure! Because we are paying our bills in US Dollars!!
What kind of stupid comparison is that?

SpEeeED
April 30, 2018 7:19 pm 7:19 PM

They investment is also in dollars

Not in INR

Love Airtel
May 2, 2018 12:48 pm 12:48 PM

All equipment is imported and is paid in $.

sheldon D
April 30, 2018 4:51 pm 4:51 PM

You are not considering the Per capita income of both countries, there is something called as average revenue per user

Rhishav (Kolkata)
April 30, 2018 3:12 pm 3:12 PM

300 million

Nikhil Mumbai-Pune
April 30, 2018 4:10 pm 4:10 PM

Hahahahahahahahahahaha!!!!!! People doing just 98 recharge with unlimited calling on Airtel!!!!! That too they face lot of problems due to congestion in 2G network!!!!! Nobody is actually using it!!!!! I hope Airtel learns its mistake soon and deploy PAN India LTE only network and VoLTE as well within two years!!!!! They should add capacity by purchasing band 1 and band 41 spectrum!!!!!

Rhishav (Kolkata)
April 30, 2018 10:32 pm 10:32 PM

No point in fighting for Band 41. Rather they should buy more Band 40 if available and Band 1. Also save money for Band 28. Yes they should close down older networks and move to VoLTE. They should bring something like JioPhone to upgrade their 2G only featurephone users to more capacity 4G networks.

Nikhil Mumbai-Pune
May 1, 2018 4:40 pm 4:40 PM

In some circles *

Nikhil Mumbai-Pune
May 1, 2018 4:40 pm 4:40 PM

Nothing is left in band 40!!!!!Everything is decided between Airtel and Jio!!!!! Band 41 in some bands is remaining which I want to see in Vodafone and Idea!!!!! Band 1 I want to see at either Jio or Voda-Idea!!!!! Want to see Voda-Idea shutting off 2G before Airtel!!!!!

Nikhil Mumbai-Pune
May 1, 2018 4:37 pm 4:37 PM

For that Jiophone alternative Vodafone needs to shut down 2G and should provide blanket 4G VoLTE network!!!!!

AU(Airtel User)
April 30, 2018 11:47 pm 11:47 PM

Band 41 have no future in india its band 40 which is used by airtel n jio. Nobody cares what idea n vodafone deploys.

AU(Airtel User)
April 30, 2018 2:18 pm 2:18 PM

Just like in India even merger in usa is not that easy, att is still struggling with its merger with time warner cable. So this merger is not happening soon.

Deb
April 30, 2018 1:14 pm 1:14 PM

Looks like they were watching the idea- vodafone merger..

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