Wireless mega-deal

T-MOBILE AND SPRINT announced Sunday they have reached an agreement to combine into a new company that would reshape the U.S. wireless landscape by reducing it to three major cellphone providers.

The deal would help the companies slash costs and could make them a stronger competitor to larger AT&T and Verizon. But consumers might see higher prices because the combined company would not have to offer as many promotions to lure customers.

The proposed all-stock deal values Sprint at about $59 billion and the combined company at $146 billion, including debt. Without debt, the combined company is valued at $26.5 billion.

It comes after Sprint dropped its bid for T-Mobile more than three years ago following concerns by the Obama administration about wireless competition. The two were poised to combine in October, but that deal was called off, too.

Sprint and its owner, Japanese conglomerate SoftBank, have long been looking for a deal as the company struggles to compete on its own.

Sprint has a lot of debt and has posted a string of annual losses. The company has cut costs and made itself more attractive to customers, BTIG Research analyst Walter Piecyk said, but it hasn’t invested enough in its network and doesn’t have enough airwave rights for quality service in rural areas.

T-Mobile, meanwhile, has been on a yearslong streak of adding customers. After the government nixed AT&T’s attempt to buy the company in 2011, T-Mobile led the way in many consumer-friendly changes, such as ditching two-year contracts and bringing back unlimited data plans. Consumers are paying less for cellphone service thanks to T-Mobile’s influence on the industry.

The supersized company would have nearly as many wireless subscribers as Verizon and AT&T. TMobile and Sprint could save money by merging networks and closing stores. The Communications Workers of America, a union for telecom workers, says the merger will cost at least 20,000 U.S. jobs.