Cellphone users await the toll
If T-Mobile-Sprint merger wins approval, even customers of Verizon and AT&T are likely to feel the effect on their pocketbooks
WASHINGTON — T-Mobile’s proposed merger with Sprint would create a new national wireless giant capable of taking on Verizon and AT&T. The combined company, which would be called T-Mobile, would cover about 100 million customers.
But how, exactly, will all those customers fare if regulators sign off on the deal? And what about the millions of customers who use Verizon and AT&T?
Here’s what you need to know.
Will my bill go up?
Possibly, but not immediately. It’s difficult to promise that prices will remain at their current levels, even though the companies say consumers should expect the deal to lower prices.
But more competition is generally regarded as better for consumers. After all, look at what happened after regulators denied an attempted merger by T-Mobile and Sprint in 2014.
That year, after regulators signaled they would reject a deal, the two companies began a price war that rippled across the industry. Then in August 2016, TMobile was the first carrier in the United States to offer unlimited voice, text and data plans. The next day, Sprint began offering a $100 unlimited voice, text and data plan for two lines. Six months later, Verizon and then AT&T followed with similar offerings. Overall, wireless prices declined 13 percent from March 2016 to March 2017, according to the Labor Department.
When T-Mobile and Sprint aggressively competed for budgetconscious customers and began gaining subscribers with lower prices, AT&T and Verizon ended up following suit.
Other changes?
Beyond lower prices, T-Mobile has been a driving force behind giving consumers more flexibility. Since 2014, T-Mobile has let consumers forgo long-term contracts and allowed users to bring the devices of their choice to its network. It eliminated roaming charges in Canada and Mexico and promised no surprise fees or taxes in its monthly bills.
Those policies were praised by government officials as proof positive that a four-way competition among the big carriers had been the right decision. They called T-Mobile a “maverick” in the wireless industry. (T-Mobile and Sprint say they would continue to offer similar policies.)
But the question is whether TMobile would still have the incentive to be as scrappy after the merger — when it would look a lot like the big telecom providers it was forced to contend with as an aggressive upstart.
“The biggest problem with this merger is that these two companies are each other’s biggest competitors for serving middle-income, budget-constrained wireless customers,” said Gene Kimmelman, a former senior antitrust official at the Justice Department who was at the department when it sued to block AT&T’s proposed merger with TMobile in 2011.
Different cultures
The combined company would be called T-Mobile, and have T-Mobile’s attention-grabbing chief executive, John Legere, in charge.
The main headquarters would be at T-Mobile’s offices in Bellevue, Wash., with a second headquarters at Sprint’s offices in Overland Park, Kan.
But the new company would be a combination of different cultures. T-Mobile has ranked at the top of recent customer satisfaction surveys, and Sprint has often lagged behind its rivals in customers’ minds.
T-Mobile has invested heavily in marketing itself as an industry rebel, with Legere out in front, insulting Verizon and AT&T on Twitter. Sprint, on the other hand, is much more reserved and its customers aren’t likely to follow its executives on social media.
What about service?
Customers of the combined company would have greater coverage across the country, especially those in rural areas whose current provider would get a boost from the other company’s towers.
And even if regulators scuttle the merger, the companies said they had struck a roaming agreement that will allow customers of either company to use the other company’s network.
The roaming agreement also helps the companies prepare to merge their infrastructure in the event the deal goes through, although it’s hard to say that customers wouldn’t experience some glitches in service.
The companies haven’t revealed any details on what kinds of service plans would be offered and what devices would be permitted. And billing and customer service would also have be consolidated, which could be a tricky transition.
‘Elephant in the room’
In a conference call with Wall Street analysts, Sprint CEO Marcelo Claure Monday acknowledged that getting regulatory approval is “the elephant in the room.” One of the first things the companies did after sending out the deal’s news release was to call Ajit Pai, chairman of the Federal Communications Commission.
The companies stressed that they plan to have more employees following the combination, particularly in rural areas, than they do as stand-alone companies now.
They also emphasized that the deal would help accelerate their development of faster 5G wireless networks and ensure that the U.S. doesn’t cede leadership on the technology to China.
And they said the combination would allow them to better compete with a growing number of competitors in a changing market.