T-Mobile US CEO Legere and Sprint CEO Claure announced their plan to merge over the weekend (Photo: T-Mobile US)

T-Mobile US and Sprint announced over the weekend that they plan to merge the two wireless companies, creating a new and bigger competitor to established players in the US wireless market.

Pending regulatory approval, T-Mobile will take over Sprint in an all-stock transaction that will create a company with annual revenue of $53-$57 billion and a work force of more than 200,000.

Once the takeover is approved, Deutsche Telekom, parent of T-Mobile, and Softbank, which owns Sprint, will hold 42 pc and 27 pc, respectively, of the merged company.

T-Mobile US is a separate entity and not part of Germany’s T-Mobile. Both belong to Deutsche Telekom.

The new US wireless player, which will bear the T-Mobile name, will be headed by current T-Mobile US CEO John Legere, while COO Mike Sievert will serve as president and COO of the new entity.

The two operators cited a common goal of leading in the race to develop a competitive 5G telecommunications network. They said the new company will be better positioned to roll out such a network faster than either of them could on its own.

“We look to build the world’s best 5G network that will make the US a hotbed for innovation and will redefine the way consumers live and work across the US,” said Sprint CEO Marcelo Claure. Claure will be on the board of directors of the new T-Mobile.

The auto industry’s plans to roll out increasingly autonomous vehicles will depend heavily on the availability of 5G connectivity, especially in the final phase of fully autonomous driving. Without 5G, experts say, it will be all but impossible to provide the reliable high-bandwidth wireless communications that driverless cars will need to communicate with other cars and the transport infrastructure.

The new T-Mobile plans to invest as much as $40 billion in its network and other new business areas in the first three years.

Said T-Mobile US CEO Legere: “This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation and a second-to-none network experience.”

-By Arjen Bongard