For months now, we’ve been hearing rumors that T-Mobile and Sprint may engage in a merger to offer better services and compete with the likes of AT&T and Verizon. It looks like things seem to be moving along very fast. According a new report from CNBC, quoting sources, both sides are now entering due diligence, with an official deal could be announced late October.
According to the report and sources, the deal will be all stock, and the exchange ratio will be “at market.” In the deal, Deutsche Telekom will be the primary and major stakeholder after the merger is complete.
Even though the merger could potentially go through, the two networks use two different wireless technology. Sprint’s network is powered by CDMA technoloy while T-Mobile uses GSM. Of course the two are not compatible, but most likely CDMA will be phased out as time goes on. Only then will the two networks be able to fully integrate and unify.
The upside to this deal is that both companies are combining forces to provide better coverage for their customers. There is a lot of room for future expansion since T-Mobile has purchased a lot of new spectrum from the FCC for 5G network.
The downside to this deal is that there will be less competition. Going from four to three major carriers, it’s possible that there could be increase in prices for wireless plans. Take Canada for example. There are three major carriers in that region and have the most expensive cellphone plans in the world.