TracFone endorses the T-Mobile/Sprint merger, cites better 'rural areas' coverage
TracFone, America's largest virtual operator that piggybacks on all of the big guys' networks, is all for the Sprint merger with T-Mobile. It has sent a letter to the FCC to express its feelings, arguing that the wedding will increase their coverage in rural areas more efficiently, and result in three full-service competitors, rather than the current Verizon/AT&T duopoly there.
This is a stone in T-Mobile's garden which has been claiming improved coverage ever since its flamboyant CEO embarked on a price and services war with the big guys, but most coverage maps and tests tell the same tale regarding rural areas. The full text of TracFone's endorsement of the deal waxes poetic about synergies, economies of scale, and so on, but its the act itself that matters most.
When T-Mobile delivers the stronger 5G network it projects, MVNOs may also explore the opportunity to enter new markets, including the Internet of Things, and other 5G-enabled wholesale services.
TracFone is owned by one of the world's richest people, America Movil owner Carlos Slim, and is an umbrella operator for a number of extremely popular prepaid brands in the US. It houses Straight Talk, Simple Mobile and Walmart Family Mobile - all prepaid juggernauts that collectively hold about 22 million customers in the US. Given that one of the reasons the merger of T-Mobile and Sprint is facing scrutiny by the FCC is that the deal may impact the number of virtual operators, the following TracFone statement is pretty important as an argument before the FCC:
TracFone believes that the merger would not only result in the more rapid deployment of a nationwide 5G network but also create a more competitive wholesale marketplace. While today’s wholesale market for MVNOs is generally competitive, the existing four nationwide MNO’s from which TracFone can purchase network capacity are not equivalent alternatives in all markets. In rural areas, T-Mobile and Sprint historically have not offered sufficient coverage and/or speeds in these geographic pockets of the United States.
With the merger of T-Mobile and Sprint, and the resulting more rapid deployment of a nationwide 5G network with broader coverage, greater capacity, higher throughput and lower latency, the wholesale marketplace will be more competitive with three full-service competitors, rather than two. The increase in competition should have the greatest effect in rural areas. The resulting excess capacity would be available for MVNOs in these areas as a third option that has not been available in the current marketplace.
When T-Mobile delivers the stronger 5G network it projects, MVNOs may also explore the opportunity to enter new markets, including the Internet of Things, and other 5G-enabled wholesale services.
The FCC has put the merger review on the backburner, waiting for more information to be submitted and reviewed, and the TracFone letter is one of those things that gives it a clearer picture whether to give the deal the green light. TracFone is not the first virtual operator in favor of the merger, while some subsidized rural networks are against it, so the FCC will have a lot of stuff to pour through until it makes up its mind on the merger.
source: FCC (PDF) via FierceWireless
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