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The T-Mobile/Sprint merger: Everything you need to know

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The merger of T-Mobile and Sprint, the third- and fourth-largest carriers in the U.S., has been close to happening for several years, and it looked for some time that it might finally be close to happening — though now we’re not so sure. The mobile carriers submitted a formal application to the Federal Communications Commission on June 18, officially beginning the regulatory review process for the $26 billion deal.

In April 2018, T-Mobile CEO John Legere took to Twitter to officially announce the merger, saying the two companies “have reached an agreement.” He posted a video of himself alongside Sprint CEO Marcelo Claure that provided some details on the merger.

The combined company would have more than 126 million customers, bringing it closer to rivals AT&T (141 million subscribers) and Verizon (150 million). The merger could also mean an improvement in overall 5G wireless technology, which promises greater, pervasive connectivity and faster speeds, but which involves costly and complicated development efforts.

We’ve got all the news and rumors to keep you up to date.

Updates

U.S. regulators may block the Sprint-T-Mobile merger

It seemed for a while like Sprint and T-Mobile were finally going to merge, but now it seems as though the deal could never happen. According to a report from The Wall Street Journal, the Department of Justice has warned both T-Mobile and Sprint that the deal is unlikely to be approved in its current iteration.

So why is the deal unlikely to go through? According to the report, regulators are concerned that the deal could end up harming competition in the wireless industry in the U.S., despite the fact that both companies insist that the deal would boost jobs and innovation. It’s currently unclear if the Department of Justice is seeking to kill the deal altogether, or if it simply wants changes to it.

If the merger were to go through, T-Mobile CEO John Legere would ultimately lead the combined company. After the report was published, Legere took to Twitter to refute it, saying that it was “simply untrue.”

T-Mobile-Sprint merger could close in Q1 2019

The Sprint-T-Mobile merger could be sooner to closing than previously thought. According to T-Mobile Chief Financial Officer J. Braxton Carter, while the deal is likely to close in the second quarter of 2019, it’s possible that things could move along even quicker and the deal could close in the first quarter.

“The only remaining thing that is happening is depositions with the [Department of Justice], which have started and will be completed in a few weeks,” he said at a conference in Barcelona in mid-November. “At this point, it’s more pointing to the second quarter as more probable (but) it could still be first quarter.”

FCC needs “extra time” to review the T-Mobile/Sprint merger

On September 11, the FCC announced that it needed more time to review the proposed merger between T-Mobile and Sprint. In the announcement, it paused the 180-day timeline for reviewing the merger, creating yet another roadblock in what could be a long process for the deal.

The FCC didn’t give too many details, but it did say that it wanted more time to allow for “thorough staff and third-party review.”

FCC begins accepting petitions to deny the T-Mobile and Sprint Merger

On July 19, the commission announced that it was officially accepting petitions to deny the merger between T-Mobile and Sprint. Both petitions (which could be filed by anyone) to deny the deal and formal comments were due on August 27, and could be submitted on the FCC’s docket page — where you could also find a list of filings from others. From there, oppositions to the petitions were due on September 17 and replies on October 19. As for when a decision will be issued, the FCC created a 180-day timeline to review the merger but wasn’t required to give an answer once those days are up. In fact, now that it has paused that timeline, it’s unclear as to when we’ll hear a final decision.

T-Mobile and Sprint file Public Interest Statement with FCC

On Tuesday, June 19, both T-Mobile and Sprint announced the next steps have been taken in attempting to make the merger a reality — by filing its Public Interest Statement with the FCC. The PIS includes a variety of arguments by both Sprint and T-Mobile as to why the merger should be approved — starting with building a “world-class nationwide 5G network” that will surpass Verizon and AT&T.

The PIS also ensures the “New T-Mobile” will not only bring rural Americans better broadband coverage with improved signal quality and increased network capacity, but that consumers will also pay less and receive more. According to both carriers, customers could see a 55 percent decrease per gigabyte and 120 percent increase in cellular data supply.

Other arguments T-Mobile and Sprint include in the filing are ones made previously when the merger was first announced — job growth and innovation. By merging both companies, the New T-Mobile is said to create thousands of additional job opportunities. With a 5G network, the new carrier could help to fund and develop products or services that bring competition to what is already out there in the consumer market.

Announcing the merger

On Sunday, June 17, T-Mobile CEO John Legere tweeted a video announcing that Sprint and T-Mobile had agreed to form a new company. In a press release from the same day, the combined companies were given a value of $146 billion. The company’s ownership will be split three ways, with Deutsche Telekom owning 42 percent and SoftBank Group holding 27 percent. The remaining 31 percent will be publicly owned.

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T-Mobile

The new company will be named T-Mobile, and Legere will serve as the chief executive officer. Sprint CEO Marcelo Claure and SoftBank Group Chairman and CEO Masayoshi Son will serve on the board of the new company.

Before the deal can be finalized, it will have to be approved by the Justice Department, which will review it for antitrust violations. In June Reuters reported the Justice Department was interviewing smaller carriers and MVNOs to determine how the T-Mobile/Sprint merger could affect their businesses.

While the Justice Department blocked a similar deal between AT&T and T-Mobile on antitrust grounds, Legere appears confident this merger will be approved

“This isn’t a case of going from 4 to 3 wireless companies — there are now at least 7 or 8 big competitors in this converging market,” Legere said. “And in 5G, we’ll go from 0 to 1. Only the New T-Mobile will have the capacity to deliver real, nationwide 5G. We’re confident that, once regulators see the compelling benefits, they’ll agree this is the right move at the right time for consumers and the country.”

One of those “compelling benefits” is likely to be job growth. The new company promises to employ at least 200,000 people in the U.S. That number is expected to grow as the “New T-Mobile” — as the company is called in the press release — has pledged to invest $40 billion in infrastructure over the course of three years.

The other major promise is that 5G is coming for all. The New T-Mobile says it will be the only wireless provider with the capability to provide true 5G service. This, in theory, will force its competitors to invest in new technologies prompting the further spread of 5G.

t mobile sprint merger new 5g
T-Mobile

“Going from 4G to 5G is like going from black and white to color TV,” Sprint’s Marcelo Claure said. “It’s a seismic shift — one that only the combined company can unlock nationwide to fuel the next wave of mobile innovation.”

The company is citing 15 times faster speeds on average by 2024 when compared to T-Mobile’s network today.

“5G for all will unleash incredible benefits and capabilities for consumers and businesses,” the release reads. “Imagine, for example, augmented reality heads-up displays that see everything you do, and provide real-time cloud-driven information about the people and objects around you. Imagine never losing anything again because low-cost sensors with decade-long battery life are embedded in everything you own. Imagine an earpiece providing real-time translation as a friend speaks to you in another language.”

Previous talks

T-Mobile and Sprint sat around a table in November 2017, when talks were said to have fallen apart due to an inability to agree on valuations. Before this, the two came close to merging in 2014, but the deal was cooled when concerns over antitrust were raised by President Barack Obama.

During the 2017 discussions, Legere said any merger would have to be in the long-term interests of shareholders. “We have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record.”

In turn, Claure echoed the sentiment: “While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination … We are determined to continue our efforts to change the wireless industry and compete fiercely.”

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During these merger talks in 2017, the carriers reportedly sought a merger without any asset sales, meaning each would keep the maximum amount of its respective “spectrum holdings and cost synergies … before regulators ask for concessions.” Such an approach could face serious questions from regulators as the Federal Communications Commission prohibits rival carriers from conspiring during airwave auctions. The carriers likely saw a very real concern that such a scheme could be rejected by antitrust regulators with the Department of Justice. Administration changes in both the Justice Department and FCC made such a rejection less likely, however.

“It is better for Sprint and T-Mobile to listen and learn the concerns of regulators first, and see whether there is anything that can be done to address those concerns,” MoffettNathanson research analyst Craig Moffett said of the impending deal.

Merging with the ‘Un-carrier’

While both companies will undoubtedly benefit from a merger, Sprint definitely had the most to lose if the talks had failed. The carrier has been playing subscriber catch-up with rival carriers AT&T, Verizon, and T-Mobile. T-Mobile is currently the third largest carrier in the U.S. with 72.6 million subscribers, while Sprint falls into a distant fourth place with around 53.6 million customers.

In addition to subscribers, Sprint continues to lag behind T-Mobile in terms of coverage as well. Earlier this year OpenSignal reported that Sprint was, once again, dead last in all of its categories for its State of Mobile Networks report.

Updated on April 16, 2019: The Department of Justice has warned T-Mobile and Sprint that their merger is unlikely to happen, according to a report.

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Tesla is showing investors its autonomous tech; here’s how to watch it live

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Tesla co-founder and CEO Elon Musk has often claimed the company he leads is well ahead of its rivals when it comes to autonomous technology. We know without a shadow of a doubt that he can talk the talk, but we’ll find out if he can walk the walk when key investors convene in Tesla’s Fremont, California, headquarters on Monday, April 22, to watch a first-hand demonstration of the technology. The full event will be streamed live on YouTube.

This is the first time Tesla has organized what it calls an Autonomy Investor Day. The company hasn’t released a schedule yet, but we know Musk and other key executives will make presentations about the self-driving technology they have been working on for years. The company will presumably have prototypes to show how the system works and what it can do.

Musk made several announcements and promises in the weeks leading up to the event. He notably explained the Model 3 is equipped with a driver-facing camera integrated into a panel above the rear-view mirror to monitor passengers when the car becomes an autonomous taxi. And, in February, he announced its fully autonomous technology will be ready for mass production before the end of 2019 — assuming regulators allow its release. His vision of the term “autonomous driving” has come under intense scrutiny, however, and many analysts doubt he can deliver a car that’s 100% autonomous. The Autonomy Investor Day is his chance to prove the naysayers wrong.

Tesla’s self-driving technology relies on eight cameras that stitch a 360-degree view of what’s around the car, ultrasonic sensors, and a front-facing radar. The gargantuan amount of data these components generate is processed by a computer the company designed in-house. Currently, this hardware only powers the company’s Autopilot suite of semi-autonomous driving aids. Motorists who buy a Tesla can pay an additional $5,000 to unlock full self-driving capability, but the feature won’t be added until it’s ready for prime time. When the time comes, Tesla will release it via an over-the-air software update.

If you’re not a wealthy Tesla investor, you can follow along by clicking on the video embedded at the top of its story. Tesla will begin livestreaming the event at 11 a.m. PT. If all goes well, Tesla will have reached a major milestone. If things don’t go as planned, the company’s goal of becoming the world’s leader in autonomous tech will become markedly more difficult to reach.

Editors’ Recommendations

Weekend box office: Curse of La Llorona tops Shazam! over slow Easter weekend

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Horror film The Curse of La Llorona outperformed expectations and took advantage of the pre-Avengers: Endgame lull to become the top movie in theaters over a relatively slow Easter weekend.

The Warner Bros. Pictures film about a vengeful spirit from Mexican folklore managed to knock off two-time champion Shazam! despite receiving less-than-stellar reviews from professional critics and audiences that saw it. The film currently earned a mere 32% positive reviews from the former, and a “B-” grade from the latter, making its box-office triumph even more impressive (and surprising).

Of course, it’s worth noting that La Llorona benefitted from a weekend in which it was one of the only prominent new releases. Studios clearly shied away from putting anything in theaters ahead of Marvel Studios’ Avengers: Endgame, a film already expected to become one of the highest-grossing movies of all time, so Shazam! was its only competition for audiences.

# Title  Weekend    U.S. Total 
1. The Curse of La Llorona  $26.5M $26.5M
2. Shazam! $17.3M $121.3M
3. Breakthrough $11.1M $14.6M
4. Captain Marvel $9.1M $400M
5. Little $8.4M $29.3M
6. Dumbo $6.8M $101.2M
7. Pet Sematary $4.8M $49.5M
8. Missing Link $4.3M $12.9M
9. Us $4.2M $170.4M
10. Hellboy $3.8M $19.6M

Overall, the weekend was also one of the lowest-grossing Easter weekends in more than 15 years, likely owing to the aforementioned Endgame effect, which kept studios from releasing any high-profile films.

As for Shazam!, the WB superhero movie continued its successful run by adding another $17.3 million in U.S. ticket sales, bringing its domestic grosses to slightly more than $121 million and putting it well past its $100 million production price tag. It’s the lowest-grossing movie of the entire DC Extended Universe at this point, but it was also the cheapest to make (by a wide margin), so it will be interesting to see how profitable it ends up at the end of its run compared to the rest of the DCEU movies.

The only other new release to crack the weekend’s top ten movies was the religious drama Breakthrough, which performed about as well as faith-based movies tend to do at the box office. The film had the typical opening weekend for movies of its ilk, earning so-so reviews from critics but praise from audiences with its story of a community that rallies around a young boy rendered comatose after falling into an icy lake, and helps him recover through the power of their religious conviction.

Two returning films hit or approached some noteworthy milestones over the weekend, too.

Jordan Peele’s horror film Us is closing in on Peele’s Oscar-winning directorial debut, 2017’s Get Out, and will likely pass that film’s ticket sales both domestically and worldwide in the next weekend or two.

Marvel’s Captain Marvel also continued to move up the all-time box-office rankings, and even experienced a jump in ticket sales over the weekend, with audiences squeezing in a last-minute screening before the title character returns — and reportedly plays a prominent role — in Endgame this upcoming week. Captain Marvel is currently the eighth highest-grossing, live-action superhero movie of all time worldwide, and the seventh highest-grossing Marvel Studios movie of all time both in U.S. theaters and worldwide.

This upcoming week is all about Avengers: Endgame, which kicks off its all-but-certain blockbuster run this upcoming weekend, and brings Marvel’s 22-film “Infinity Saga” to a close with a three-hour event that brings together the entire Marvel Cinematic Universe. There’s no question as to whether it will be the weekend’s top movie, and the only unknown at this point is how long it will remain the highest-grossing movie in theaters and whether it will indeed end up — as many pundits expect — becoming the highest-grossing movie of all time.

Editors’ Recommendations

Can new laws protect you from smart home security breaches?

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As internet-connected devices are getting more and more popular, lawmakers are looking at new ways to help protect consumers — and ensure their data isn’t being put at risk by the companies that hold it.

At the federal level, there have been a number of attempts to add regulations that would protect owners of internet of things devices. The Cybersecurity Improvement Act of 2019, introduced last month by Senator Mark Warner of Virginia, would create new requirements for internet-connected devices. The details of the bill are a bit sparse, but it would require the National Institute of Standards and Technology to develop new recommendations for device makers to follow. Those rules would aim to shore up some of the cybersecurity shortcomings that currently plague internet-connected devices, like easy-to-guess default passwords that put millions of products and the households that have them at risk.

“The IoT Cybersecurity Improvement Act attempts to … provide light-touch guidance and security requirements for IoT devices to protect the industry and ultimately the consumer,” wrote North Carolina Rep. Ted Budd, a co-sponsor.

A number of states have gone a step further than the federal law, actually creating specific rules that device makers would have to follow. California, often a leader in digital privacy policy, passed a bill regulating internet of things devices in 2018. Set to go into effect on January 1, 2020, the law will require companies to include “reasonable” security features on their products. That includes requiring shipping devices with unique passwords or forcing users to set passwords when they set up the device.

In Oregon, lawmakers are pursuing a similar path. The state’s House of Representatives recently passed a bill that will require each smart device sold in the state to come with a unique password. The extremely simple requirement is one of the easiest ways to mitigate brute force attacks, in which hackers are able to crack the protection on devices because they use a default password that owners often opt not to change. Hackers can then set up botnets and other attacks that can target many devices at once.

Oregon’s law would also require device manufacturers to follow any federal laws that are passed if they implement stricter requirements than the state’s own laws.

Editors’ Recommendations

Toyota leads $1 billion investment in Uber’s self-driving tech division

uber now offers a 15 monthly plan for access to cheaper fares
Anthony Wallace/AFP/Getty Images

In a move many analysts accurately qualified as a “when” rather than an “if,” Uber has finally taken the first step toward going public. The ridesharing service filed its S-1 forms on Friday, April 12, and it will trade on the New York Stock Exchange under the ticker symbol “UBER.” Toyota led a $1 billion investment in Uber’s Advanced Technologies Group, the division in charge of developing the company’s self-driving technology, weeks before its shares begin trading on the stock market.

While Uber has yet to disclose the exact valuation it is seeking, it could pull off one of the largest-ever initial public offerings (IPOs) in the tech world. The company reportedly hopes to sell about $10 billion worth of stock, according to Reuters. That would value it at up to $120 billion, which is a lot of money for a company that is still operating in the red. According to Uber’s S-1 filing, it reported losses of $1.85 billion in 2018 despite generating revenues of $11.27 billion. The company disclosed some of its financial details in the past, so those figures shouldn’t come as a total surprise to prospective investors, but it’s still a pretty sizable amount to lose while seeking such a high valuation.

Uber’s ridesharing business, which is its primary calling card, generated $9.2 billion in revenue in 2018, with gross bookings of $41.5 billion over the course of the year, according to the filings. In the fourth quarter of the year, Uber’s drivers completed 1.5 billion trips. The company also has a growing secondary stream of income with Uber Eats, its food delivery service, which fulfilled 91 million orders during the last quarter of 2018.

Going public doesn’t guarantee the company will make money. In its IPO filing, it warned its operating expenses will increase significantly in the coming years, and it clearly stated that it “may not achieve profitability.” The company is notably spending a tremendous amount of money to developing self-driving technology, and it’s recovering from a string of scandals that sent riders running toward rivals.

The $1 billion investment should boost investor confidence, however. Toyota and automotive supplier Denso contributed $667 million to the total amount, while SoftBank’s Vision Fund added an additional $333 million. The new cash injection values the Advanced Technologies Group at $7.5 billion. Toyota will invest an additional $300 million over a three-year period as Uber prepares to build autonomous ridesharing vehicles based on the next generation of the Sienna minivan. The prototypes will join pilot programs starting in 2021, but the two partners are laying the groundwork for mass production.

It’s impossible to think about Uber’s upcoming IPO without putting it in context of its rival Lyft, which also went public earlier this year. Lyft revealed losses of $1 billion in 2018 on significantly smaller revenues than Uber, generating $2.1 billion that year. The company reported $8.1 billion in bookings over the course of 2018. It also came out seeking a much smaller valuation. Lyft had an initial valuation of around $24 billion.

It’s hard to what, if any, change Uber’s IPO will have on riders. Because the company’s financial information will be more scrutinized and investors will push the company to reach profitability sooner rather than later, riders may see fares increase as the company tries to quickly get out of the red.

Updated April 19, 2019: Added information about Toyota’s investment.

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