T-Mobile Us Inc (NASDAQ:TMUS) is finally coming to the financial altar with Sprint Corp (NYSE:S), prepared to create some real competition for AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ). The price is $26 billion, to be paid entirely in stock at 9.75 Sprint shares for each one of T-Mobile stock.

Deutsche Telekom AG (ADR) (OTCMKTS:DTEGY) will have 40% of the new company and, along with Sprint majority owner Softbank Corp/ADR (OTCMKTS:SFTBY), operating control from Bellevue, WA. T-Mobile’s John Legere will be CEO, his number two will be President, and Sprint CEO Marcelo Claure will only have a board seat.

It’s a huge comedown for Masayoshi Son, the Softbank CEO who once talked of owning a single globe-girdling wireless network. Previous attempts to reach a deal floundered on his insisting Sprint control the resulting company. But it’s also a huge opportunity to transform the market landscape.

A New 5G Landscape for T-Mobile Stock

Between them, T-Mobile and Sprint had 29.75% of the wireless subscription market at the end of 2017. Verizon led with a 35.2% share, AT&T was second at 33.4%.

The two larger companies, both of which began as regional Bell operating companies in the 1980s, have been running the market as a virtual duopoly for decades.

Both hand shareholders fat dividends, a yield of 4.85% for Verizon, a fat 6.04% for AT&T. They also have enough financial clout to buy big companies outside their industry, Yahoo and America Online for Verizon, Time Warner Inc (NYSE:TWX), which is pending, for AT&T.

But in their online site supporting the deal, the two merging companies insist they can compete head to head with their larger competitors in 5G, which could deliver mobile carriers speeds equivalent to those of wired carriers.

Tests by Qualcomm, Inc. (NASDAQ:QCOM), offered at the latest Mobile World Congress meeting in Barcelona, showed download speeds of 1.4 Gbps in one simulated network.

Wired internet service providers have suggested a video stream can consume 3 Mbps, 25 Mbps for high-quality 4K streaming. Other services require less speed. The average 4G LTE connection can deliver speeds of 5-12 Mbps.

The net result of 5G, then, will be to provide real competition, not just for the wireless networks of AT&T and Verizon, but for their wired networks, and that of Comcast Corporation (NASDAQ:CMCSA) as well. For consumers who spend most of their time out of the house, it may be a total internet solution.

Will This Get Done?

Despite the obvious advantages, there remains skepticism whether the deal will get done. Sprint shares are valued at $6.62 in the proposal but are currently trading around $5.50.

The transaction must be approved by both the Federal Communications Commission and the Justice Department, which rejected the sale of T-Mobile to AT&T for $39 billion back in 2011. The joint bidders are also foreign controlled, T-Mobile in Germany and Softbank in Japan, so opponents may also claim national security concerns.

For their part, Legere and Claure tweeted a video stating the deal will allow the new company to invest $40 billion in their network, 50% more than both invested over the last three years. Legere and Claure say their network will have the highest capacity in U.S. history, combining Sprint’s assets at 2.5 GHz and T-Mobile’s assets at 600 MHz.

Still, Verizon and AT&T are among the biggest lobbyists in the U.S., and both are certain to oppose the deal.

The Bottom Line for Mobile Carriers and T-Mobile Stock

With or without this deal, mobile carriers will have to invest tens of billions of dollars over the next five years in building out 5G, which requires new cell tower equipment and the harnessing of new spectrum bought during this decade’s spectrum auctions.

That means you can expect net income to decline and debt levels to rise at all three major carriers, or four if the deal gets scuttled, which could affect the price of T-Mobile stock. The dividend payouts of the big two are not threatened yet, but you can bet they’ll claim they are in the coming debate.

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance, The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he owned shares in T.