New T-Mobile to 'lower prices' vs Verizon, what are the Sprint merger's odds?

T-Mobile's $26 billion merger with Sprint, until recently considered a done deal, is under threat. We've been getting numerous emails from national security organizations with tons of arguments why this shouldn't go ahead from their vantage point, and now the Department of Justice seems to be stalling the process to a screeching halt.

That's the entity that ultimately matters, and T-Mobile's CEO John Legere has been shuttling back and forth in Washington D.C. to the point that he got flak for staying exclusively in Trump's hotel in the capital with the hint that he might be using this to curry favors with the White House.

While Mr Legere is staying in a comfortable and secure establishment or trying to buy influence, depending on whose comments you chose to believe, the FCC has frozen the clock on its 180-days allowance for review and analysis of the deal with input from interested third party participants.

Will the T-Mobile-Sprint merger be approved? Politicians, unions, and the competition file against

It's hard to tell but odds have swung in favor of a no deal, say analysts. Too many political points are to be scored against the deal than for it, for instance. Besides the usual "letters of concern" from the competition, Senators like Amy Klobuchar, Kirsten Gillibrand, Elizabeth Warren, Cory Booker and Bernie Sanders have also written on to DoJ and the FCC to state that the deal will "raise prices for consumers, harm workers, stifle competition, exacerbate the digital divide, and undermine innovation." In addition, we have 37 Members of Congress penning a similar letter, calling the merger "a bad deal for the American people."

Back in the fall, the competition had reportedly given up on derailing it, and is actually trying to push through conditions that will benefit it when the merger goes through. C-Spire, for instance, met with FCC reps, and reiterated their desire for checks and balances on the resulting third-largest US carrier. 

The national security angle

On the other hand, there is a growing concern among the national security apparatus that, besides the usual arguments for job losses and price hikes, the merger will be a nightmare scenario in light of the Red Menace attitude towards China in Washington now. 

Protect America, for instance, an advocacy group of current and former foreign policy and national security experts that was found last fall, is lobbying tooth and nail against the deal on account of the "foreign ownership interests in a combined Sprint-T-Mobile." The organization was very giddy when it became clear that the DoJ is planning to block the merger in its current state:

Also, of course, Russia. Yes, Russia's MTS carrier and Deutsche Telecom ties and then, tangentially, T-Mobile US. And hacking, lots of hacking, or something.

The T-Mobile-Sprint response to the merger blockage

T-Mobile's CEO John Legere, COO Mike Sievert, and CTO Neville Ray, as well as Sprint's executive chairman Marcelo Claure, have met with the FCC commissioner Jessica Rosenworcel this past week to lay down the counterclaims to all of the above.

First off, the New T-Mobile will "focus on taking share from Verizon and AT&T through lower prices," they said, and won't be charging extra for 5G like Verizon does, for instance. Needless to say, the new formation will be able to afford this aggressive strategy because of the spectrum synergies and cost savings.

Meanwhile, as usual in such mergers, each separate entity tried to present the dire case of going it alone by publishing a comparison of their current apocalyptic state and the rosy future should the merger be approved:

Sprint went so far in its argumentation as to claim that it will be a hair short of having to enter bankruptcy protection if the merger with T-Mobile doesn't get approved. That's most likely an exaggeration to tip the scales but it will undoubtedly be forced to limp along nonetheless. 

The Department of Justice will have its final say at the beginning of June, and the FCC has stopped the clock on Day 141/180 for its own analysis, so we would know very soon if there will be three major US carriers duking it out in a much welcome price war on the cusp of the nationwide 5G rollout.



1. ihatebiasedclickbaits

Posts: 12; Member since: Apr 13, 2019

Hope it gets blocked, otherwise thousands will get fired and prices will go up a lot in the long run, even if Tmobile keeps prices down in the near future.

2. Acdc1a

Posts: 475; Member since: Jan 21, 2016

ARPU goes down 6% by 2024, not exactly short term is it?

5. Droid1

Posts: 30; Member since: Oct 06, 2017

Sprint will be bought from someone eventually. They can't survive on their own.

8. Dr.Phil

Posts: 2427; Member since: Feb 14, 2011

Thousands are going to be fired either way. Sprint will be forced to fire people in order to maintain competitive prices and offerings.

3. ShadowHammer

Posts: 207; Member since: Mar 13, 2015

Why is there such a huge difference in competition and pricing between 4 vs 3 competitors? Is there some universal formula out there that proves this? Or is it based on past history that shows whenever there are mergers, prices go up for consumers 100%, 80%, or 60% of the time? In my mind, having two large companies compete against two smaller companies isn't as competitive as three large companies competing against each other. It levels the playing field, so to speak. Curious what insights others have on this.

7. TBomb

Posts: 1549; Member since: Dec 28, 2012

Solid question. I don't think that there is a 100% definitive outcome should the carriers merge vs not. So with that said, take my thought process on this with a grain of salt, but here it is: Having 4 (2 bigger and 2 smaller) means that the big ones don't fight each other for subscribers as much as just trying to take subscribers from the little guys because they, typically, have less resources to compete with - hence why they're smaller. The little guys are also trying to compete with each other so they have to at least offer on-par products/services with each other as well as giving a true USP from the big guys to keep people from changing to the big guys where there is more resources to support them as customers. If the 2 small guys merge to become equal size to the big guys, then the big guys become complacent because the cost to convert a subscriber from a big guy is much higher than a small guy and not completely worth the effort. The only effort companies would put in is to grab the new customers that are not subscribed to anyone - which can easily be done by offering deals that are limited in time (ie. ISP's offering a lower price for 1 or 2 years before bringing the prices to a normal amount everyone else pays). Once a customer is in, it's much much easier to keep them in than to take them from someone else, so all of the investment would go into that.

4. jarome

Posts: 23; Member since: Jul 05, 2012

Why don't people believe the T-Mobile will lower prices, increase jobs, and offer the best nation-wide 5G? They have time and time again revolutionized the industry. I have been using T-M for 4 years now and love them. For example, where else can you tweet to the Network Chief about a service issue and actually get it acted upon in days? T-M's customer service is second to none. I get 42 Mbps down and 12 Mbps up in Oak Ridge TN. Not shabby. This merger will benefit everyone except Verizon and AT&T, who need to be cut down to size.


Posts: 58; Member since: Oct 25, 2018

For many reasons but the most notorious ones are: - Metropcs merger - With the biggest spectrum purchased for 4G still doesn’t cover rural areas and many places

6. Blazers

Posts: 750; Member since: Dec 05, 2011

Where were these senators when AT$T bought Time Warner?

9. civicsr2cool

Posts: 272; Member since: Oct 19, 2016

This would be a horrible merger. Let Sprint rot and die before letting this go through.


Posts: 58; Member since: Oct 25, 2018

Yeeepp am agreed, Tmo basically wants to kill it’s closest competition and scoop their spectrum for almost free

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