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Tech: T-Mobile and Sprint announce merger to win the war for 5G (TMUS)

Smartphones with the logos of T-Mobile and Sprint are seen in front of a Soft Bank logo in this illustration

T-Mobile and Sprint announced Sunday that the two mobile carriers will merge. The new combined entity will be called T-Mobile and will have a wireless subscriber base of around 70 million, compared to 111 Verizon subscribers and 78 million AT&T subscribers.

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T-Mobile and Sprint announced Sunday that the two mobile carriers will merge.

The new combined entity will be called T-Mobile and will have a wireless subscriber base of around 70 million, compared to 111 million Verizon subscribers and 78 million AT&T subscribers. When the merger takes effect the number of major mobile carriers in the US will shrink from 4 to 3.

The announcement comes just five months after Sprint and T-Mobile officially called off the last attempts at a merger, and marks the third time in four years that the firms explored the idea of merging.

There are two major shifts in the mobile carrier space that T-Mobile and Sprint are hoping to lead with their combined resources.

First is 5G network development. Carriers, governments, and hardware makers are moving full steam ahead to deploy next generation mobile networks, an effort that T-Mobile and Sprint separately were lacking the resources to lead.

The new combined company will be able to leverage a wider swath of spectrum holdings and infrastructure to lead 5G development. “The new T-Mobile will have the network capacity to rapidly create a nationwide 5G network with the breadth and depth needed to enable U.S. firms and entrepreneurs to continue to lead the world in the coming 5G era,” T-Mobile said in a press release.

The second shift is convergence of mobile networks, broadband, and video. The lines that separated mobile networks from home broadband networks is fading as consumers use their mobile connections for more digital activities, like streaming video. That line will only blur further as fast 5G networks start to roll out.

As this shift occurs, the role of mobile carriers is changing from just providing wireless, to being purveyors of all of a consumer’s connectivity and providing access to mobile video. The combined Sprint/T-Mobile will be able to leverage their resources to offer lower prices and better compete with leading mobile carriers like Verizon and mobile-minded internet providers like Comcast as this shift occurs.

While T-Mobile and Sprint agreeing to merger terms is a big step forward, the pair still need to get approval from regulators to finalize the deal. Regulators have generally held an unfavorable view of shrinking the US mobile carrier market from 4 to 3, a move that government entities have claimed will reduce much-needed competition.

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