One of the most successful wireless service providers in the US is a smaller competitor, but it needs the approval of the government to merge. The merging companies are telling regulators that as standalone companies, they can not fully upgrade to the next generation of wireless technology. They need to team up, or US mobile customers will not benefit from an upgraded network, businesses say.
This description also applies to AT & T's proposed acquisition of T-Mobile USA in 201
Trump's regulators may see similarities between AT & T's network upgrade claims in 2011 and T-Mobile today. They even looked at statements from T-Mobile and Sprint a few months ago, when every company said it was on the right track for a massive 5G deployment – without mentioning a merger. But the new Republican leadership of the Federal Communications Commission is much friendlier to Democrat than Telekom and could easily approve the T-Mobile / Sprint combination.
The failed merger of AT & T / T-Mobile
After take-off With their merger in December 2011, both AT & T and T-Mobile completed the leap from 3G to 4G. AT & T has maintained its dominant position with Verizon Wireless. T-Mobile overtook Sprint to become the nation's third largest carrier and routinely claims (whether or not it does) that its network is even better than that of AT & T and Verizon.
But suddenly, after years of boasting about how his network is the best In the US, T-Mobile says it's impossible to make an effective transition from 4G to 5G, unless it's allowed to buy Sprint. The change in rhetoric might be less surprising if T-Mobile's past claims about its network were limited to its ability to implement 4G. But two months ago, T-Mobile said it would build "5G in 30 cities this year" and that "it would provide a truly transformative 5G experience on your smartphone nationwide."
"T-Mobile is in a unique position with 5G, with its unoccupied spectrum holdings and multi-spectrum strategy," the company said on February 27. While other wireless companies will need to outsource customers from their congested LTE networks to 5G, 5G, the Un-carrier 5G "
The CEO of Sprint, Marcelo Claure, told investors in February that Sprint's" strong spectrum "is" Sprint would be able to be the leader in the real 5G mobile. "Sprint maintained the positive news about 5G on February 27, claiming it would" deliver the country's first 5G mobile network in the first half of 2019 "
Something must have changed dramatically in the past nine weeks, and T-Mobile and Sprint said at the merger announcement on Sunday: "None of the companies can create a nationwide 5G network with the breadth and depth required to run the boost the next wave of mobile Internet innovation in the US and tackle competitive challenges from overseas. "
AT & T 2011: T-Mobile has no" clear path "to LTE
AT & T made similar arguments in 2011." T-Mobile USA has no clear way to deliver LTE, "AT & T said at the merger announcement.The AT & T description of the benefits of the merger in the public interest placed T-Mobile's ability to even provide LTE coverage in question: "T-Mobile USA has already devoted its current spectrum to UMTS / HSPA + and GSM technologies."
AT & T promised that if the government allowed the merger, 4G LTE "would be given to 95 percent of US population would be delivered to reach an additional 46.5 million Americans beyond current plans – including rural communities and smaller towns. "
FCC staff members have completed their analysis and concluded that the claims of AT & T AT & T alone "would have enough spectrum for LTE deployment," the FCC said in a report that contributed to the collapse of the merger.
"There is ample documentation that AT & T is ahead of the Announcing a rugged rollout from LTE planned "The FCC staff wrote
that the route from 3G to 4G at T-Mobile was less clear, but the FCC staff thought there was at least a chance that T-Mobile would have an LTE Network.  "While T-Mobile's LTE deployment is less secure, but not impossible, we also find extensive documentation in the dataset to at least question whether LTE penetration is suitable as a model input for T-Mobile," said the FCC on the
We know what happened after the death of AT & T / T Mobile Fusion. AT & T today says it covers more than 317 million people with LTE, about 97 percent of Americans – higher than the 95 percent that AT & T could achieve when paired with T-Mobile.
AT & T has doubts about T-Mobile In October 2015, T-Mobile's LTE coverage exceeded 300 million Americans by the end of 2017 and 322 million by the end of 2017 to boost LTE. (The failed merger helped T-Mobile because AT & T had to pay a $ 4 billion crash fee including $ 1 T-Mobile spent $ 8 billion on a frequency auction last year.)
Sprint also tried T-Mobile in 2014 However, the deal was abandoned after appeals by the Obama administration. T-Mobile handed over Sprint to subscribers in 2015 and has since expanded the gap between the third and fourth largest providers.
Calling on Pai
Sprint's weak financial position today is comparable to T-Mobile's position in 2011. We can. If the T-Mobile / Sprint merger is blocked, Sprint's network and customer base will not be in a few years be more predictable. But even Sprint's public promises about using 5G as of February disagree with any argument that it can not deliver a huge and powerful 5G network without being absorbed by T-Mobile.
Nevertheless, the T-Mobile / Sprint argument is tailor-made to please US regulators. FCC chairman Ajit Pai focuses on "reducing regulatory barriers" to promote upgrades from 4G to 5G mobile networks. Wireless industry lobbyists argue that China and South Korea could beat the US in the "5G race" if the government does not pursue more industry-friendly policies.
The FCC needs to examine whether mergers are in the public interest and Pai may refer to T-Mobile's 5G claims as justification for approving the deal. The deal also requires the approval of the Justice Department to block AT & T's acquisition of Time Warner Inc.
"We believe the rise in government interest in creating an attractive investment climate for the 5G operation will improve business opportunities," New Street research analyst Blair Levin wrote in a note to clients before the deal was announced The Wall Street Journal .
Consumer advocacy groups want the government to block the merger, say customers are better off with four nationwide mobile operators than with three. To counteract the 5G claims, they could point to the consequences of AT & T / T-Mobile.
"Leaders of both [T-Mobile and Sprint] have previously said that they would offer [5G] services across the country and that their networks would be the best in the industry" wrote the New York Times yesterday in an editorial. While T-Mobile and Sprint claim that their combined 5G wireless connection will be good enough to compete against the Internet service, "There is a long history of telecom executives failing to deliver big promises on abundant and cheap broadband . "