T-Mobile Agrees to Invest Billions In Order to Complete Sprint Merger

Telecommunications company T-Mobile has promised to invest $41 billion in California in order to sign off on its acquisition of Sprint for $26 billion.

The former will invest $41 billion in California infrastructure to provide 99% of households statewide with 5G broadband.

T-Mobile will invest in “fifth generation” wireless connectivity as a requirement for its acquisition of Sprint. California Emerging Technology Fund (CETF) negotiated T-Mobile’s investment which has to be approved by the California Public Utilities Commission.

“This is a significant step for underserved areas,” said California Emerging Technology Fund CEO, Sunne Wright McPeak, to the Business Journal.

According to McPeak, both companies will benefit from their merger not just from a larger customer base, but also because they will combine their distinct radio spectrums.

T-Mobile says it will also invest $41 million in cash outlays for programs in California. This includes $5 million for advertising LifeLine rates for low-income customers, $13.5 million for school improvement programs, $4.5 million for digital literacy for an estimated 75,000 new LifeLine customers and $13 million to support CETF.

“The next-generation wireless is meant to support multiple connected devices at the same time at speeds that are faster than current connections,” said McPeak.

According to an FCC filing, Sprint’s CEO Michel Combes met with FCC Chief of Staff Matthew Berry to discuss the proposed $26B merger between Sprint and T-Mobile last Friday.

Combes discussed the “competitive and financial challenges Sprint faces as a standalone company and the public interest benefits of the proposed T-Mobile/Sprint merger.”

Disclaimer: We have no position in T-Mobile Us Inc. (NASDAQ: TMUS) nor Sprint Corp (NYSE: S) and have not been compensated for this article.