Proposed T-Mobile and Sprint Merger Gains Support From FCC Chairman Ajit Pai

[MacRumors]

United States Federal Communications Commission Chairman Ajit Pai said this week that he would recommend approval of the merger between T-Mobile and Sprint (via Bloomberg). The news comes after T-Mobile and Sprint announced changes to their $26.5 billion merger agreement, including the sale of the prepaid brand Boost Mobile, a three-year buildout of their 5G network, and a pledge not to raise prices while the network is being built.

Under the new plan, the companies will sell off Sprint's Boost Mobile brand, but keep Virgin Mobile and T-Mobile's Metro brand. If Sprint and T-Mobile had kept all three, they would have owned the largest chunk of the prepaid cellular market in the United States, totaling about 42 percent of the market.

"Two of the FCC's top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity," Pai said in a statement Monday. "The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives."

If completed, the new combined company would ditch the Sprint name and be called T-Mobile, and current T-Mobile CEO John Legere would serve as the Chief Executive Officer. Sprint and T-Mobile have said the new company will be a "force for positive change" in the U.S. wireless, video, and broadband industries, supercharging T-Mobile's Un-carrier strategy and allowing it to "lead in the 5G era."

Although Pai's approval is a big step, the merger still needs to be approved by the full FCC board and the Department of Justice. In April, Sprint and T-Mobile announced a deadline extension for the merger to July 29, 2019.

Article Link: Proposed T-Mobile and Sprint Merger Gains Support From FCC Chairman Ajit Pai

 

[HailstormX]

Of course he would...

 

[adamw]

Looks like it will go through... No real loss with having to get rid of Boost, as that would duplicate the Metro brand.

 

[IPPlanMan]

I’m sure those penalties for the companies not following through on their merger guarantees/assurances will be a real deterrent for them...

Damn you SoftBank.

 

[ArtOfWarfare]

Sounds good to me. We're moving from having two top tier companies (AT&T vs Verizon) with two secondary companies (Sprint vs T-Mobile) to having three top tier companies (AT&T vs Verizon vs T-Mobile). The whole mess of cheaper options are still there, and the increased competition at the top should help to cause AT&T and Verizon to offer cheaper and better plans.

 

[RobNYC]

Sounds good to me. We're moving from having two top tier companies (AT&T vs Verizon) with two secondary companies (Sprint vs T-Mobile) to having three top tier companies (AT&T vs Verizon vs T-Mobile). The whole mess of cheaper options are still there, and the increased competition at the top should help to cause AT&T and Verizon to offer cheaper and better plans.

That's not increasing competition though. There are now going to be less cellular providers.

 

[computersteve]

I don’t like this..

 

[SoundJudgment]

Hurray! Finally! T-Mo+ here we come.

 

[DonutHands]

That's not increasing competition though. There are now going to be less cellular providers.

It's almost comical to call Sprint a competing cellular provider. This merger gives T-Mobile/Sprint a fighting chance in the marketplace.

I don't know what will happen moving forward, but T-Mobile and Sprint have in recent memory been making changes for the good of the consumer with Verizon and AT&T only making changes to somewhat match what T-Mobile has done.

 

[myapple2019]

That's not increasing competition though. There are now going to be less cellular providers.

For both company customers, be ready for price increase. For the both company employees, be prepared for restructuring effect. Any duplication functions and divisions will be streamlined, which generally would lead lay off unfortunately. I wish the best for both companies customers and employees.

 

[Guda.FL]

That's not increasing competition though. There are now going to be less cellular providers.

I had sprint on my work line. I would not put them in a “carrier” competitor category. Abysmal.

 

[Breaking Good]

For both company customers, be ready for price increase. For the both company employees, be prepared for restructuring effect. Any duplication functions and divisions will be streamlined, which generally would lead lay off unfortunately. I wish the best for both companies customers and employees.

As part of the agreement they've agreed not to raise prices for three years. After that it is anyone's guess.

I just hope they don't seel Boost off to American Movil. That would not help the discount wireless industry.

The issue with the employees is bad. But it is better for them to do it now the unemployment rate is so low rather than to have to do it in the next economic downturn.
[doublepost=1558365914][/doublepost]

It's almost comical to call Sprint a competing cellular provider. This merger gives T-Mobile/Sprint a fighting chance in the marketplace.

I'm very happy with my Sprint service. But I agree 100% with what you said above. Sprint just doesn't have the subscriber base necessary to build out a nationwide network by itself.

I live in a heavily populated area. (I think I hav five Apple Retail Stores within 45 minutes of me.) So I have great Sprint coverage. But I realize that many others are not in a similar situation. There are others who may only have one option because of where they live.

I am not going to say that this will end well for everyone. There is no way I can do that. But having three carriers that can compete head-to-head on a 5G buildout beats having just two.

Now, I would like to see the FCC mandate certain coverage requirements for 5G buildout. I would like to see something like you have to guarantee that you can cover, 95% of the U.S. population with either 5G or 4G cellular service and set minumum download and upload speeds for each.

The airwaves are owned by the people of the United States and they should be managed for the greatest benefit of the people of the United States, not just for a few or three mega-corporations. And no, I don't hold out hope that the current FCC Chairman has that in mind.

 

[jlc1978]

Looks like it will go through... No real loss with having to get rid of Boost, as that would duplicate the Metro brand.

Yup. Just move everyone to Metro.

 

[vipergts2207]

That's not increasing competition though. There are now going to be less cellular providers.

Normally I'd see something like this as a bad thing, and maybe it is, but T-Mobile and Sprint don't really compete at the level ATT and Verizon do. My guess is that we'll probably see slightly reduced costs (or better service/more data at the same price) at the upper-end if they can get to ATT/Verizon quality of coverage, but slight increases at the lower-end where the pre-paid and such providers play and who were competitors to Sprint/T-Mobile.

 

[cjake]

Yup. Just move everyone to Metro.

The existing customer base would need to be included in the sale, otherwise it would be extremely difficult to find a buyer. And finding a buyer for Boost is a requirement for the merger.

The sale might come with an agreement such that the new owner could continue to use the Sprint (now T-Mobile/Sprint combined) network.

Nothing to prevent Boost customers from moving to Metro or elsewhere on their own.

 

[nutmac]

As part of the agreement they've agreed not to raise prices for three years. After that it is anyone's guess.

Prior to the merger announcement, T-Mobile was an aggressive competitor. Lowering price every few years and/or offering more for less. Generous discounts for older customers. Free Netflix on higher priced plans. And so on.

But after the merger announcement, much of T-Mobile's focus is targeted at premium plans while eliminating certain benefits (e.g., $10/month per line discount for using less than 2 GB/month), and increased activation and upgrade fees.

I think it's safe to assume that New T-Mobile doesn't need to raise the price for at 3 years.

The key question is, would New T-Mobile become competitive again after the merger?

There will be some benefits. In-home 5G wireless broadband is the most obvious, an area that desperately needs more competition. Without Sprint's 2.5 GHz band, T-Mobile probably can't as easily offer in-home wireless broadband nationwide.

For mobile 5G, however, I think New T-Mobile will suffer some short- to intermediate-term damage as the company tries to integrate and handle traffic from both T-Mobile and Sprint customers. But once all the wrinkles are ironed out, perhaps most customers will get better coverage and throughput. I hope.

In terms of value, I am very skeptical. I doubt New T-Mobile will be as aggressive and competitive as before. As long as they are cheaper than AT&T and Verizon, some may not care. But I think it's sad that US customers are paying so much more than many other countries for far less. And with New T-Mobile, that probably isn't going to change for the better.

 

[jlc1978]

There will be some benefits. In-home 5G wireless broadband is the most obvious, an area that desperately needs more competition. Without Sprint's 2.5 GHz band, T-Mobile probably can't as easily offer in-home wireless broadband nationwide.

Given Tmobile's introduction of TV service in select markets I'd say that is a bnig part of the play. Tmobile wants to replace cable with an all in one bundle.

https://www.t-mobile.com/tv/tvision-5g?icid=WMM_TM_19TVISION_PA2VVRA6448Z3T4B16799

But I think it's sad that US customers are paying so much more than many other countries for far less.

I don't get the whole perception that US consumers pay more for less. You can get unlimited data/text/calling no-contract on Tmobile for $70 that includes all of the US. In addition, you get unlimited text and lower speed data in quite a few plces oversees. I quick check shows that to it's 80 Euros for anything close in Germany, and that omnly includes unlimited data in Germany from Tmobile. If you have more thmna one line in the US proces drop quickly; or if you qualify for a miliotary/first responmder/senior citizen/corporate discount.

From where I sit the big difference is you can buy plans for less with data limitation; but you can also get them on prepaid in the US or on sopme tier 2 carriers for less, such as form WalMart.

 

[MadeTheSwitch]

In terms of value, I am very skeptical. I doubt New T-Mobile will be as aggressive and competitive as before. As long as they are cheaper than AT&T and Verizon, some may not care. But I think it's sad that US customers are paying so much more than many other countries for far less. And with New T-Mobile, that probably isn't going to change for the better.

I think they will. I think they have been in somewhat of a holding pattern because of this pending deal. When it goes through they will still have to be aggressive against Verizon and AT&T, as it will be the only way to grow.

 

[alexandr]

Normally I'd see something like this as a bad thing, and maybe it is, but T-Mobile and Sprint don't really compete at the level ATT and Verizon do. My guess is that we'll probably see slightly reduced costs (or better service/more data at the same price) at the upper-end if they can get to ATT/Verizon quality of coverage, but slight increases at the lower-end where the pre-paid and such providers play and who were competitors to Sprint/T-Mobile.

in my experience, att's service is just as bad as t-mo's. at least in nyc.

 

[nutmac]

I don't get the whole perception that US consumers pay more for less. You can get unlimited data/text/calling no-contract on Tmobile for $70 that includes all of the US. In addition, you get unlimited text and lower speed data in quite a few plces oversees. I quick check shows that to it's 80 Euros for anything close in Germany, and that omnly includes unlimited data in Germany from Tmobile.

T-Mobile in Europe is an expensive carrier.

If you compare T-Mobile USA to say, Vodafone UK, you get postpaid plans like £24 for 100 GB data per month and unlimited everything else.

In the US, T-Mobile wants everyone to be on pricier unlimited plans to subsidize heavier users.

 

[UnusedLoginID]

I still think T-Mobile doesn’t know what they’re getting into.
Do they know how old is the technology that Sprint uses for activation ?
I mean, you can’t swap a Sprint SIM from one phone to another without having to call Sprint and have them update their database.
Try doing this with a non-Sprint universal unlocked phone and the agent will tell you the phone is not compatible. You have to tell them to get a supervisor to manually enter the IMEI of the phone in their “supported” list.
I mean, Sprint has thousand of employees sitting in offices spending their time just activating phones.
Even Verizon is much smarter at this with their CDMA network. Swap SIM and go.
And I’m not even talking about how poor Sprint network is, even with coverage it’s usually half the speed.
Recently they’ve just tried gaining new subscribers with low prices just to artificially raise their value - the subscribers - to T-Mobile. No investment in network, they’re hoping for T-Mobile to do that AFTER the purchase.
I hope T-Mobile switches every Sprint customer to GSM quick and ditches the old Sprint CDMA Infrastructure and people. Sorry for the Sprint tech support people but they’ll be the first to go once it happens.

 

[cocky jeremy]

That's not increasing competition though. There are now going to be less cellular providers.

Sprint was never competition. At all. They're a total joke. Less companies, but more competition. T-Mobile can be even more competitive now.

 

[Breaking Good]

For mobile 5G, however, I think New T-Mobile will suffer some short- to intermediate-term damage as the company tries to integrate and handle traffic from both T-Mobile and Sprint customers. But once all the wrinkles are ironed out, perhaps most customers will get better coverage and throughput. I hope.

I agree with a lot of what you wrote. But in terms of the above, Google is already doing this with its Google Fi service. The Pixel phones as well as a few LG and Motorola phones will operate across both networks now.

I think we both agree with 5G will not be the panacea in regards to cellular service as some believe. But like you I do see it benefiting at home broadband service.

 

[PinkyMacGodess]

What could go wrong? What do we have to lose?

EVERYTHING...

 

[ArtOfWarfare]

That's not increasing competition though. There are now going to be less cellular providers.

Where are you suggesting that there needs to be increased competition? It seems to me that there's no shortage of dirt-cheap with questionable coverage type of providers in the US - Metro, Virgin, Boost, Spire, etc.

There has long been a shortage of competitors at the top-tier. It's been AT&T vs Verizon for over a decade. Sometimes there's been Sprint or T-Mobile thrown into the mix, but that's like talking about Libertarians or the Green Party in US politics. Sure, they theoretically exist, but really it's Republicans vs Democrats.

With Sprint and T-Mobile combined, maybe we'll finally see a company that's really able to compete with AT&T and Verizon.