T-Mo is taking a major step toward a deal with Qualcomm Inc. for its LTE service, the company announced on Wednesday.
The deal would create a major player in the wireless market with a $24.5 billion stake in Qualcomm, the wireless chip maker that makes the technology used in the phones that are so popular in many countries.
T-MO is buying Qualcomm for about $9.7 billion, with Qualcomm agreeing to sell its stake in 2018, said John Burke, the group’s chairman and chief executive officer.
“It’s going to be a massive deal, a huge deal,” Burke said in an interview on the Bloomberg Television business program “Bloomberg Markets.”
T-mo’s stock fell more than 5% on Wednesday after the announcement.
The announcement marks a dramatic turnaround for T-mobile, which had been trying to secure a buyer to take on the struggling cellphone company in the wake of the smartphone boom and consumer complaints about slow speeds and unreliable service.
The company’s stock surged more than 10% after the deal was announced.
It had been trading below $10 per share on Monday.
T-Mobile was already the second-largest carrier in the U.K. after TalkTalk, and its deal with the Taiwanese firm could boost that position to third place, said Eric Schmidt, an analyst at Bernstein Research in New York.
Tess Brown, an independent telecom analyst who follows T-Mobility, said she thought T-Mobiles stock would continue to rise.
But she expects the deal to result in an even greater increase in T-mobility’s market share.
TMobile and Qualcomm have been trying for months to reach a deal, and the latest move shows they are close to an agreement, Brown said.
Turing Communications Corp. is the biggest U.L.N.T.O. company.
It offers mobile broadband and fixed-line wireless services in the United States, Britain, Canada, Australia, New Zealand and the Middle East.