T-Mobile and Sprint have agreed, in principal, to a deal which would see the two companies merge.
The deal would be worth $32bn, and would see the third and fourth largest wireless telecommunications providers in the United States combine to consolidate third place – and close in on their considerably larger rivals.
According to the details of the merger, it would be Sprint who acquire T-Mobile for $40 per share plus stock. That’s a 17% premium compared to T-Mobile’s stock price at the close of the market on Wednesday.
This move would be the latest in a recent spree of US comms companies consolidating and consuming one another. Verizon is the nation’s number one mobile provider, and it recently seized full control of Verizon Wireless from Vodafone for a massive $130bn. Meanwhile AT&T, their nearest competitor, splashed out $49bn on DirecTV, the USA’s biggest satellite TV operator. By comparison, then, this deal seems like relatively small change. It is undeniably one which needs to take place if T-Mobile and Sprint are to stay relevant, though.
Unfortunately, it will inevitably mean fewer options for the US consumer. With activists and service providers approaching a flashpoint over the cost and choking of data, less variety is exactly what the US mobile market doesn’t need right now.
On the other hand, perhaps T-Mobile and Sprint’s newfound collaborative power will allow them to compete with the big two by offering similar services at lower prices. US consumers can dream, at least.
It bears repeating that this deal is, at this stage, only in principal and still has the possibility to collapse. Until then though, US mobile comms is well on its way to shrinking even further
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