T-Mobile, Sprint tout consumer benefits in merger filing
- T-Mobile and Sprint have filed a merger request with the Federal Communications Commission (FCC) to create a mega-company, called "New T-Mobile."
- The merger proposal touts consumer benefits such as a $40 billion investment in a 5G network that's more powerful and can be rolled out quicker than competitors', claiming the unified 5G network "would leapfrog Verizon and AT&T's networks." New T-Mobile promises it would also improve 4G LTE coverage until 5G arrives.
- The proposal claims that with New T-Mobile, "American consumers will pay less and get more" because "capacity will double and the cost of delivering data will plummet." It also promises to boost broadband coverage in rural areas and hire thousands of employees to build out the new network and support customers.
The proposal boldly claims that separately, Sprint and T-Mobile have not been able to "erode Verizon and AT&T’s wireless market share or overcome their scale advantages," but New T-Mobile would be able to compete aggressively, making it pro-consumer and pro-competition.
Even bolder is the claim that New T-Mobile would "leapfrog" its competition with 5G. Sprint and T-Mobile both have been working to build out their 5G networks this year in select cities, with the hope of bringing the networks online next year. Competition has been fierce in the race to 5G, with Verizon and AT&T working on their own build-outs and system tests. To sweeten the pot for FCC approval, the merger proposal expresses the desire to not just beat domestic carriers in the 5G race, but also outdo rollouts in other countries.
Without the merger, Sprint and T-Mobile both will still launch 5G networks but they say that would happen at a slower pace. Promises of a quicker 5G launch could appeal to the FCC, considering that deployment speed was rumored to be a factor in the federal agency's recent vote to relax the national approval process for small cells, necessary hardware for 5G networks.
The proposal hits hard with making the case for public benefits, clearly understanding that's one of the main reasons for rejecting large companies' merger requests. The New T-Mobile proposal insinuates that the 5G progress and lower prices alone would benefit consumers. But throw in additions like job creation and bridging the digital divide with better rural broadband — a pet project of FCC Chairman Ajit Pai and some members of Congress — and the companies claim the merger "clearly will serve the public interest, convenience and necessity."
If approved, the New T-Mobile deal is expected to go through during the first half of next year.
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