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

By April 30th, 2018 AT 12:10 PM

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.

Read more on:

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

24
Leave a Reply

avatar
Photo and Image Files
 
 
 
5 Comment threads
19 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
12 Comment authors
Sandeep Bansal, ManipalLove AirtelNikhil Mumbai-PuneAU(Airtel User)Rhishav (Kolkata) Recent comment authors
newest oldest most voted
SpEeeED
SpEeeED

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

Rhishav (Kolkata)
Rhishav (Kolkata)

300 million

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

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)
Rhishav (Kolkata)

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.

AU(Airtel User)
AU(Airtel User)

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

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

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

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

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
Nikhil Mumbai-Pune

In some circles *

sheldon D
sheldon D

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

dragonmonk
dragonmonk

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

SpEeeED
SpEeeED

They investment is also in dollars

Not in INR

Love Airtel
Love Airtel

All equipment is imported and is paid in $.

Pritam Das
Pritam Das

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)
AU(Airtel User)

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.

Person.A
Person.A

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.

AU(Airtel User)
AU(Airtel User)

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.

Recent Posts

Asus Zenfone Max Pro M1, Max Pro M2 and Max M2 to Get Android 9 Pie Update by April 15

Android 9 Pie is coming to three Asus phones including Zenfone Max Pro M1, Zenfone Max Pro M2, and Zenfone...

Vivo V15 Pro Review: Bringing Innovation to Masses

Although Vivo isn’t a brand you would prefer when it comes to buying phones in the premium segment; there is...

Dell and Alienware Launches Three New Gaming Laptops in India

Refreshing its PC gaming portfolio in India, Dell and its subsidiary Alienware on Monday launched Alienware Area-51m, Alienware m15 and...