T-Mobile said it officially closed its merger with rival Sprint — creating a wireless carrier with over 100 million customers nationwide — and reiterated its pledge to not increase customers’ fees for the next three years.
The deal, worth more than $31 billion based on T-Mobile’s closing stock price Tuesday, ends the nearly two-year effort to combine the two companies in what they’ve asserted would create a strong No. 3 competitor to industry leaders AT&T and Verizon.
John Legere, who served as CEO of T-Mobile since 2012, stepped down Wednesday from the position with the deal done. He will remain a board member through the company’s June 2020 annual shareholders meeting. Former T-Mobile COO Mike Sievert assumed the role of president and CEO of the combined company effective immediately, a month ahead of the previously announced CEO transition plan.
The FCC and the Justice Department last year approved the merger, with conditions including Dish Network buying Sprint’s prepaid businesses and acquiring $3.9 billion in spectrum. The deal faced a court challenge from several U.S. state attorneys general who argued the tie-up would lead to higher prices and reduced choice for consumers; that lawsuit was dismissed by a federal judge in February.
The “new T-Mobile” has committed to delivering customers the “same or better rate plans for three years,” which includes access to 5G wireless service. Pricing plans will remain as they are for now, including the free Netflix offer for T-Mobile customers with unlimited family plans and Sprint’s bundling of Hulu (with ads) for no extra cost to unlimited subscribers.
The company says it will invest $40 billion into its network and business over the next three years, while it claims synergies from the integration of T-Mobile and Sprint will yield at least $43 billion in cost savings. The network will have 14 times more capacity in the next six years than T-Mobile alone has today, the company said.
“The New T-Mobile’s commitment to delivering a transformative broad and deep nationwide 5G network is more important and more needed than ever and what we are building is mission-critical for consumers,” Sievert said in a statement.
The Communications Workers of America union (which does not represent a significant number of workers from either T-Mobile or Sprint) has estimated the merger will result in the loss of over 28,000 jobs, the majority from expected closures across the combined companies’ retail locations. As of the end of 2019, T-Mobile had about 53,000 full-time and part-time employees; Sprint last reported 28,500 employees as of March 2019. Legere has claimed the T-Mobile/Sprint merger will create at least 11,000 new jobs by 2024.
Last month, the parent companies of T-Mobile and Sprint revised the financial terms of the pact, under which at closing Deutsche Telekom owns 43% of the new T-Mobile; Japan’s SoftBank Group holds a 24% stake; and the remaining 33% held by public shareholders. SoftBank, which was the majority owner of Sprint, conceded to reduce its stake in the merged entity from 27% previously.
Shares of the combined company’s common stock will continue to trade on the NASDAQ Global Select Market under the symbol “TMUS.” As of Wednesday (April 1), Sprint shares will no longer trade on the New York Stock Exchange.
Pictured above: Mike Sievert, CEO of the new T-Mobile (left); ex-CEO John Legere