T-Mobile US and Sprint Corp. are making plans for a $26.5 billion merger. If approved, it could create a wireless company that would be close in size to rivals AT&T and Verizon. The merger could also reshuffle thousands of square feet of real estate in the retail space.
The merged firms would operate under the T-Mobile name with two headquarters in Bellevue, Wash., and Overland Park, Kan.
In the retail space, there will be some initial closures where the T-Mobile and Sprint stores overlap, but executives with the new T-Mobile say they plan to continue expanding their retail network when merged. In particular, they plan to target rural areas and open hundreds of new stores.
Wireless providers have been among the most active retailers leasing store space, according to an analysis by the CoStar Group. Of 15,000 retail leases signed through October of last year, T-Mobile accounted for 435 of them—which was by far the highest number of any other firm. T-Mobile represented 16 percent of the most active retail tenants signing leases. They also absorbed more square footage than other single retail tenants, totaling more than 712,000 square feet, according to CoStar.
T-Mobile opened nearly 1,500 new T-Mobile stores in 2017. Sprint opened more than 1,000 new stores and is projected to add several hundred more this year.
Wireless carriers accounted for 10 percent of the retail square footage signed by the 170 most active tenants through October of last year, according to CoStar.
T-Mobile and Sprint hope they’ll be able to establish their dominance in the wireless race to
usher in the era of a 5G cellular networks from the merger.
“We are going to be investing in jobs to build the new cell towers to build out 5G, jobs to expand our U.S. call centers, and jobs for hundreds of new stores we intend to open across the country,” says John Legere, current president and chief executive of T-Mobile US. “In fact, nowhere will that growth be more prevalent than in rural America, which is dramatically underserved today.”
The four major wireless service providers in the U.S. only cover about 55 percent of rural communities, according to the FCC.
“That push deeper into the United States would also mean a shifting of real estate around cell towers and microsites,” CoStar notes in its report.
The FCC will need to approve the merger before it becomes official. That process could take a year or more. T-Mobile and Sprint will continue to operate separately until the merger is approved.
The combination of T-Mobile and Sprint would account for 31.4 percent of wireless connections in the U.S., which could come closer to rivals AT&T (which is at 35 percent) and Verizon (32.4 percent), according to FCC data.
Source: “Merger of T-Mobile and Spring Could Reshuffle Millions of Square Feet of Office, Retail, and Tower Space,” CoStar Group (April 30, 2018)
