Freezing plan prices and a Boost sale puts T-Mobile's merger with Sprint back on track


UPDATE: The rumored merger approval concessions have now taken shape. T-Mobile and Sprint will have to spin off Boost, and complete their 5G network rollout in a time span of three years, during which the new T-Mobile can't raise plan prices from their current levels. "New T-Mobile will make available the same or better rate plans as those offered by T-Mobile or Sprint as of  XX date for three years following the merger, " is the exact wording.

Here are the exact network commitments within the first three years:

1. a Low-band 5G Coverage Area covering at least 97% of the U.S. Population (85% of the rural population;
2. a Mid-band 5G Coverage Area covering at least 75% of the U.S. Population;
3. 5G Sites nationwide;
4. MHz of low-band and mid-band 5G Spectrum averaged over all 5G Sites
deployed nationwide (the sites described in Section I.A.3 above);
5. 75% of the U.S. Population having access to download speeds equal to or greater
than 50 Mbps, as verified by a drive test; 1 and
6. 63% of the U.S. Population having access to download speeds equal to or greater
than 100 Mbps, as verified by a drive test.

And after the six-year mark:

1. a Low-band 5G Coverage Area covering at least 99% of the U.S. Population;
2. a Mid-band 5G Coverage Area covering at least 88% of the U.S. Population;
3. 5G Sites nationwide;
4. MHz of low-band and mid-band 5G Spectrum averaged over all 5G Sites
deployed nationwide (the sites described in Section I.B.3 above);
5. 99% of the U.S. Population having access to download speeds equal to or greater
than 50 Mbps, as verified by a drive test; and
6. 90% of the U.S. Population having access to download speeds equal to or greater
than 100 Mbps, as verified by a drive test.

The original story follows below: 

T-Mobile's merger with Sprint is in trouble in its current state, just when it seemed imminent. A new Bloomberg report even cites insiders who claim that the carriers may have to divest their successful prepaid businesses if they want to merge as scheduled. 

Boost, Metro by T-Mobile, Virgin Mobile - these are household pay-as-you-go names with millions of subscribers and immediate brand recognition, and they may have to go. Just a few months ago, a T-Mobile exec was arguing that the prepaid businesses will stay unharmed by the merger. In fact, the execs were absolutely certain that they won't have to bargain for anything back in September:


Boost and MetroPCS may have to be sold 


Fast forward to the current regulatory scrutiny, and the plans for revamping the merger proposal apparently include "selling airwave licenses or setting up a new fourth carrier through a network-leasing arrangement," too, both of which sound much less palatable than simply selling Boost or Metro.

The DoJ’s antitrust department that has to sign off, and the Federal Communications Commission, will have to be placated somehow if T-Mobile and Sprint want the merger to still have any chance of passing through, and apparently prepaid is the way. The issue, however, is that the two carriers together hold more than 40% of the pay-as-you-go market, followed by the carrier-agnostic TracFone with 32%, and Cricket with 25%. 

The eventual spinoff of Boost, Virgin and Metro by T-Mobile will create a seismic shift in the up-and-coming prepaid market, especially if they keep using the combined network capacity of the new T-Mobile which will also create its own post-merger conflict of interest. Oh, the drama!

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6 Comments

1. phoneclash

Posts: 40; Member since: Dec 18, 2018

Is this merger even worth it? With all that has to be done just to get approval, and who’s going to buy them? US cellular seems content to stay in the sticks, maybe Dish? Optimum?

2. chazz08

Posts: 1; Member since: May 14, 2019

I wouldn’t be surprised if Spectrum or Xfinity bought one of the prepaid services. They are trying to get into the phone market anyway.

4. RocketDoc

Posts: 21; Member since: Jul 24, 2018

For Sprint as an independent company I see some point to Boost and Virgin since Sprint no longer offers prepaid service to new customers. But T-Mobile does offer prepaid service that doesn't differ in concept from Metro, except that Metro only sells through dealer stores while T-Mobile prepaid can be ordered online. If T-Mobile plans to continue offering prepaid service after the merger, is there a business reason to keep in-house competitors that could be spun off for needed cash while maintaining contractual relationships for wholesale capacity, like they do with Straight Talk, SIMPLE Mobile, and WalMart Family?

5. spuntwirlin007

Posts: 1; Member since: May 14, 2019

Tmobile is being egregious they had more chances to go this route and failed; now they are behind the ball

6. DarthJarJar

Posts: 64; Member since: Feb 01, 2018

They need to block this merger. How are they gonna build a network if the people who ran sprint are gonna be involved.

* Some comments have been hidden, because they don't meet the discussions rules.

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