As the novel coronavirus pandemic has resulted in social distancing measures and the shuttering of events around the world, it hasn’t stopped the merger between T-Mobile and Sprint from going through right on schedule today.
It’s been a long and rocky road for the two telecom giants, who began talks back in 2017, but then had to face delays from the U.S. Federal Communications Commission, approval from the U.S. Justice Department, and then a litany of lawsuits by several states who tried to block the merger for antitrust reasons.
However, after a U.S. federal court judge ruled in favour of the merger back in February, the two companies set a date of April 1 to finalize the deal, and as California became the last state to drop its opposition, the last potential roadblock had been cleared, leaving everything pretty much on track.
T-Mobile officially announced the completion of the merger this morning, which creates the New T-Mobile, a “supercharged Un-carrier that will deliver a transformative 5G network.” Technically speaking, the parent company will remain T-Mobile US, Inc., although CEO John Legere will be stepping down as expected to hand the reins over to former Chief Operating Officer Mike Sievert.
Legere’s departure actually isn’t a surprise — he already announced his plans to step aside late last year — but it wasn’t originally expected to happen until next month, and he’s also leaving the company that he basically helped reinvent over the past few years. Legere has become an almost legendary CEO by telecom company standards, turning T-Mobile around and bringing it from a distant fourth place behind Sprint into a company that was capable of buying Sprint instead.
At this point it’s not yet clear what’s going to happen to the Sprint brand. T-Mobile hasn’t mentioned it, and a Sprint spokesperson, responding to an inquiry from The Verge, couldn’t say whether any immediate changes were in the works, simply stating that they’re exciting to get to work in following through on the plans for the New T-Mobile.
Big Promises, Big Plans
Getting the merger approved didn’t come easy for T-Mobile and Sprint, and they had to make a number of pretty big promises about how they were going to improve their network in order to calm the fears of the FCC and the Justice Department, not to mention a number of concessions to the various states that were in opposition — especially California and New York.
However, even before it could leave the lawsuit from the states behind it, T-Mobile finished its nationwide 600MHz 5G network, and did so ahead of schedule, and promises that by six years from now it will actually be able to provide basic 5G coverage to 99 percent of the U.S. population, with 50Mbps speeds to 90 percent of those living in rural areas. It also goes beyond cellular, with the company promising to launch a new high-speed home wireless internet service to 90 percent of the U.S., along with free internet access to 10 million homes who can’t otherwise afford it.
It’s also going to have to do all of this without raising prices for the next three years, while divesting itself of Sprint’s prepaid businesses such as Boost Mobile and Virgin Mobile by selling them to Dish and letting Dish use T-Mobile’s network for the next seven years in hopes that it will be able to rise from the ashes of Sprint to take over the vacated fourth place spot.
In the short term, however, not much is going to change for customers, who will simply be keeping the same service plans that they already have. At some point, those on Sprint will likely find themselves moved over to equivalent T-Mobile plans as the company slowly absorbs the Sprint brand.