Sprint And T-Mobile Merger For A 5G Powerhouse
Sprint and T-Mobile will merge to create a 5G powerhouse. After several years of on and off talks, it is now official that the merger will be realized. The deal could, however, face serious regulatory challenges.
Reason For The Merger
The ostensible reason for the merger is, if you ask the networks, all about 5G. T-Mobile’s John Legere will serve as CEO. Mike Sievert will continue operating as COO. Sprint chief Marcelo Claure will serve on the Board of Directors, alongside Masayoshi Son, CEO of Sprint’s parent company’ SoftBank.
What Is 5G
The two networks claim they can roll out a “broad and deep” 5G network faster if they do it together rather than by themselves. They head off concerns about reduced competitions by claiming that the 5G landscape involves not just mobile. 5G is becoming useful for fixed broadband. So the unified Sprint and T-Mobile will ostensibly compete against cable providers.
The two have wide swaths of wireless spectrum that only sometimes overlaps. You could see more comprehensive coverage. There is no question that the 5G’s gigabit-class bandwidth and low lag make it more a viable option for fixed internet access.
Replacing broadband is the focus of the first 5G deployment, not with upgrading your smartphones.
The deal should close not later than the first half of 2019 if regulators clear it. The problem is with the big “IF”. The current US government is anti-regulation. It has not been exactly kind to telecom related mergers. We cannot ignore the past when officials shot down AT&T’s attempt to buy T-Mobile back in 2011. T-Mobile and Sprint maintained that their unified company will produce more jobs. But large companies always claim this. Regulators will want proof that the combined company will not slash thousands of jobs in the name of eliminating overhead.
Effect Of The Deal
The deal would, unfortunately, reduce the US to just three major cell carriers. A merger could create a company on the same scale as AT&T and Verizon, forcing the incumbents of more competitive pricing, that is, assuming that sprint and T-Mobile will not use the merger as an opportunity to rest their laurels.