Updated at 3:07 p.m. ET
T-Mobile and Sprint have reached a "definitive agreement" to merge in an all-stock deal, which would create a new company with a total value of $146 billion, based on current stock prices.
The two companies — the third- and fourth-largest U.S. wireless carriers, respectively, behind Verizon and AT&T — have been trying to merge for years. But previous efforts have failed, often falling apart under intense regulatory scrutiny.
This deal still needs regulatory approval, from both the Justice Department, which will weigh antitrust concerns, and the Federal Communications Commission, which will consider whether the deal is in the public interest.
U.S. regulators have recently challenged AT&T's $85 billion deal to purchase Time Warner Inc., Reuters notes, and "are expected to grill Sprint and T-Mobile on how they will price their combined wireless offerings."
The companies say merging will allow them to lower prices and put more pressure on Verizon and AT&T.
"The new company will be able to light up a broad and deep 5G network faster than either company could separately," the companies said in a press release.
In a video announcement, the CEOs of T-Mobile and Sprint emphasized the potential of 5G. They also described the merger as a job creator, and emphasized the competition in wireless — anticipating antitrust challenges to their plan to combine.
In general, Sprint and T-Mobile may be hoping for a more favorable hearing from regulators this time around.
This past fall, the FCC approved a report that said the mobile wireless industry has "effective competition."
"Most reasonable people see a fiercely competitive marketplace," FCC Chairman Ajit Pai said. "To those who want to impose more regulation upon the wireless marketplace, the reality of effective competition is an inconvenient truth."
Responding to the same report, however, FCC Commissioner Jessica Rosenworcel, however, mentioned the possibility of a merger between two of the major companies.
"Any transaction before us will require someone to explain how consumers will benefit, how prices will not rise, and how innovation will not dissipate in the face of so much more industry concentration," she said.
NPR's Alina Selyukh has noted that it's not clear how consumers would be affected by a Sprint/T-Mobile merger.
"Consumer advocates have criticized [such a] merger, pointing to the declines in the cost of service since a merger was shot down in 2014," she wrote last fall. "In May [2017], when rumors surfaced of a new attempt to combine the carriers, the former FCC chairman and former antitrust chief from the Obama administration penned a column that warned that prices would rise if a fourth player disappeared."
"Absorbing Sprint, T-Mobile would take on a messy network and debt," Alina writes. "But combined, the two would rise into a No. 3 much closer to AT&T and Verizon in terms of the overall number of subscribers."
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