On-Again Wireless Couples Sprint and T-Mobile have agreed to a $ 26 billion merger that would benefit all customers and increase competition. The government broke the union four years ago, but the Trump administration should give its blessing.
The T-Mobile Sprint agreement would unite the third and fourth largest mobile operators in the US. With 100 million customers, the company would be able to offer Verizon Wireless (116 million) and
AT & T
(93 million). Their combined LTE networks would cover 96% of the US population, which is a little less than Verizon and AT & T.
We are always skeptical about savings from "synergies" ̵
Do not compete with Verizon Wireless and AT & T on coverage Sprint and T-Mobile have been trying to increase their market share through price cuts and unlimited data rates. But, Verizon and AT & T have followed. In 2016, Wi-Fi prices fell 13%.
Falling prices are good for consumers, but over time, Sprint and T-Mobile are unlikely to be able to maintain customer subsidies and build their networks. The two companies have committed $ 60 billion in debt and will have to fight for survival in the impending 5G era, which requires huge capital investment.
Sprint and T-Mobile have spent half as much on investment this year as Verizon and AT & T. Spectrum is expensive – T-Mobile has spent $ 8 billion to get more low-band equipment at the government's last auction. Acquire types – and will be even more valuable in the Internet of Things.
A T-Mobile Sprint connection broke up last fall due to disagreements between management and control, but both sides have reached an amicable division of labor. The greater danger now is that the state regulators interfere with the union.
The Obama Department of Justice blocked 2011 a merger between AT & T and T-Mobile and concluded that the broadband market needed at least four national players to compete. In 2014, the Obama administration has made a kiboosh between T-Mobile and Sprint. And last year, the Trump Justice Department sued the acquisition of AT & T
– the first vertical merger has challenged it in 40 years. A federal judge is expected to decide on the case soon.
Government agencies could try to get credit for increased wireless competition, but prices might not have fallen if Congress had not pushed the Federal Communications Commission to auction more frequencies in 2015 and 2017. Nevertheless, the data Slow download speeds are often slow and data can be restricted while roaming.
Consolidation in a high fixed cost industry is likely to be unavoidable, but should not upset regulators as the market is dynamic.
has deployed a mobile service with Verizon Wireless. AT & T intends to provide wireless service to homes.
hoarded spectrum that could be used for a proprietary network or in partnership. A T-Mobile Sprint condo would make the market more competitive.
Published in the printed edition of May 1, 2018 as "When T-Mobile Met Sprint."