Apr 29, 2018 - Technology

T-Mobile, Sprint CEOs say 5G makes the case for deal

Sprint and T-Mobile CEOs sit on chairs next to a big graphic that says 5G for all

Sprint and T-Mobile's chief executives announced the deal in a video Sunday. Screenshot: Axios

T-Mobile and Sprint executives said that the coming together of tech and media, along with the looming arrival of 5G networks necessitate their combination. The companies also said a deal will create jobs, not kill them.

Why it matters: The companies face a tough battle to convince regulators to allow them to merge, reducing the number of national cell phone providers from four to three.

What they're saying: In a conference call on Sunday, the CEOs of both companies made the case that the deal will allow the combined entity to do things that neither could do operating solo, including building "the first and best" 5G network.

  • T-Mobile CEO John Legere, who is slated to run the combined company, promised the deal will create thousands of jobs and said he is convinced regulators will approve it.
"These companies just make sense together."
— T-Mobile CEO John Legere
  • "Now is the time to come together," said Sprint CEO Marcelo Claure, who will not have an executive role but plans to join the combined company's board.

Focus on jobs, rural impact: Executives may have been talking to reporters and investors, but a big part of their pitch was to regulators, playing up how a deal could benefit rural consumers and create U.S. jobs.

"This is a job creating transaction," Legere said, adding that it expects to have more U.S. employees on its payroll after the deal than the current companies do today.

(Of course, if the companies add jobs between now and when the deal closes, that would make that statement true. The real question is what happens a year or two after a merger.)

On merging networks: T-Mobile plans to use its network as the basis for the combined company. It will move Sprint's legacy voice network, known as CDMA, over to LTE over time. T-Mobile President Mike Sievert said T-Mobile will use its handling of the MetroPCS acquisition as a blueprint.

The companies are also counting on network overlap to provide much of promised cost savings, including the decommissioning of about 35,000 cell sites that would not be needed. On the small cell front, T-Mobile would build around 50,000 up from about 10,000 today for the combined company. But, he said, far more would have been needed had the two companies operated solo.

Lots of brands: T-Mobile will also have to sort out all its combined brands, which include T-Mobile, Sprint, MetroPCS, Boost Mobile and Virgin Mobile, as well as a few others. It says it will announce plans once the deal closes.

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