Proposed Merger of T-Mobile and Sprint Moves a Step Closer to Completion
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A year after proposing a $26 billion merger, T-Mobile and Sprint now have the backing of FCC Chairman Ajit Pai, but consumer advocates remain wary of the deal, warning that it could lead to reduced competition and higher prices.
Pai says he plans to send a draft order to fellow commission members, asking them to approve the deal in “the coming weeks.” One of the four—Brendan Carr—already has stated his support for the deal.
The Department of Justice still must approve the plan, too.
The merger would join the two smallest of the four major wireless carriers yet leave the pair trailing Verizon and AT&T in terms of customer base.
Pai argues that the deal benefits consumers because it will expand broadband and higher-speed 5G service to rural areas that might not otherwise get it.
“This is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans,” he said in a statement Monday.
But George Slover, senior policy counsel at Consumer Reports, says the merger would do nothing to advance innovation or help the average person.
“It would simply mean fewer choices for consumers, higher prices, and lower quality,” he says, calling on the DOJ to use its authority under antitrust laws to block it.
Sprint sits with AT&T at the very bottom of Consumer Reports’ service and reliability ratings for 20 cellular providers, while T-Mobile is rated the best among the current Big Four. The scores are based on ratings from more than 100,000 CR members, who reported on experiences with their current cell-phone service provider.
The Big Four companies all lag far behind smaller services such as Consumer Cellular, Google Fi, and Ting in the ratings.
T-Mobile and Sprint argue that the merger is needed for both companies to stay competitive and make the investments required to bring broadband internet service to rural areas and quickly build a 5G network. As part of the deal, they’ve pledged not to raise prices for three years.
They’ve also agreed to sell off Sprint’s Boost Mobile prepaid wireless service, to ward off concerns about competition in that segment of the market.
The companies say they bring mobile broadband with speeds of at least 100 megabits per second to 90 percent of the country’s population (and broadband with speeds of at least 50 Mbps to 99 percent).
They say their 5G network will cover 97 percent of the U.S. population within three years, and 99 percent within six.
Verizon is currently the only carrier with a working 5G network and compatible smartphones. But its 5G service is up and running only in parts of Chicago and Minneapolis.
By year’s end, it plans to expand 5G service to a total of 30 cities.
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