Sprint and T-Mobile Have a $27 Billion Problem to Solve
From left, T-Mobile US Inc. Chief Executive Officer John Legere and Sprint Corp. CEO Marcelo Claure during an interview on Fox Business Network on April 30, 2018.
Photographer: Richard Drew/AP Images
When T-Mobile US Inc. and Sprint Corp. announced on April 29 their $26.5 billion plan to merge, they argued that the combined entity could create a more formidable rival to the biggest wireless providers: Verizon Communications Inc. and AT&T Inc. Indeed, the merged pair would be able to pool their research and development spending and wireless spectrum rights to more quickly offer customers 5G service, the next generation of superhigh-speed wireless communications. Trouble is, few seem to believe this marriage of convenience will bear fruit.
The day after the announcement, shares of Sprint—the target of the all-stock offer—suffered their worst drop in a year, falling 14 percent. T-Mobile stock also got hammered, declining 6.2 percent, as investors feared regulators would nix the deal.