T-Mobile-Sprint deal: Will you pay more?
Questions remain for consumers
Impact of potential merger of No. 3 and No. 4 cellular carriers uncertain
The pending $26 billion TMobile-Sprint merger cleared a major regulatory hurdle Monday when Federal Communications Commission chairman Ajit Pai gave his blessing to the corporate marriage.
But even if the merger of the nation’s No. 3 and No. 4 wireless carriers goes through, and the odds of that happening appear to have improved, uncertainties remain about the potential impact on consumers.
Opponents insist the effect won’t be good, resulting in reduced competition, higher prices for cellular coverage and a loss of as many as 30,000 jobs.
T-Mobile and Sprint have long claimed otherwise and previously committed to not raise prices for three years.
Sprint also has suggested in regulatory filings that, without merger approval, Sprint’s very long-term viability is in question.
To win FCC approval and placate critics, the would-be merger partners agreed to concessions, including accelerating deployment of 5G broadband in rural America to help close the digital divide.
Industry analyst Roger Entner of Recon Analytics isn’t concerned about wireless prices, which he says “have always gone down,” a trend he expects will continue.
What isn’t quite clear, though, is whether the perks that come with some current plans – free streaming on Netflix and Hulu, for example – will last into the future.
T-Mobile and Sprint also have argued that the deal will help them compete against their much bigger rivals Verizon and AT&T, especially as all the carriers roll out speedy next-generation 5G wireless networks.
Critics aren’t buying it. “The T-Mobile-Sprint merger is still anti-competitive and anti-consumer. The companies have made a handful of promises on 5G, rural build-out and in-home broadband that are speculative, not specific to the merger and completely unenforceable,” Gigi Sohn of the Georgetown Law Institute for Technology Law & Policy said in a statement.
Matt Wood, vice president of policy and general counsel at the Free Press advocacy group, put out a statement. “The digital divide isn’t just about rural build-out – though as others opposing the deal have shown, the merged companies’ spectrum wouldn’t allow for decent rural coverage at 5G speeds . ... Both T-Mobile and Sprint are already building 5G networks without the deal.”
Wood instead says “the FCC should focus on the affordability crisis” and an “adoption gap that makes it hard for poorer people to get online, and it keeps people of color disconnected more often than other demographic groups.”
T-Mobile and Sprint also agreed to part with Boost Mobile, a Sprint-owned prepaid carrier that competes against Metro by T-Mobile.
The service, which you pay for in advance, is typically where you’ll find the cheapest prices, with Boost and Metro accounting for nearly half the market.
Boost Mobile founder Peter Adderton, who had been a vocal opponent of the merger, now describes himself as “absolutely ecstatic that the FCC made the right decision enforcing them to divest Boost.”
Still, he remains cautious with how the FCC concessions play out.
“The devil is going to be in the details,” he says.
Adderton, who runs Boost in Australia from his base on Los Angeles, is interested in buying a newly independent Boost.