Sprint, T-Mobile Bullshit Their Way to Merger Approval Sprint and T-Mobile this week officially pitched their $23 billion merger to the FCC in a new filing (pdf) that attempts to convince the agency the job-killing, competition eroding deal will be wonderful for American consumers. Sprint and T-Mobile's sales pitch proclaims that the United States can't be a leader in next-generation 5G wireless without merging. The companies also state, without evidence and in stark contrast to historical precedent, that their merger will lower rates and increase competition in the wireless space.

"The combined company will have lower costs and the incentives to engage in aggressive pricing to expand its 4G LTE customer base as the industry continues its major transformation towards 5G," the duo claim. "To date, T-Mobile and Sprint, individually, have not been able to materially erode Verizon and AT&T’s wireless market share or overcome their scale advantages. New T-Mobile, however, will be able to go toe-to-toe with the two larger rivals to the benefit of competition and consumers." Except that history repeatedly shows how reducing the overall number of direct competitors in a sector reduces the overall incentive to compete on price, often raising rates and reducing quality customer service (go ask a Canadian wireless user). And any financial gains are routinely pocketed by executives and investors. Sprint and T-Mobile also continue to claim that their $23 billion merger will be a huge job creator. "The merger will create jobs on New T-Mobile’s first day and going forward. New T-Mobile will hire employees to build the new network; extend the Un-carrier customer care model to a wider subscriber base; and support customers in growing segments like in-home broadband, enterprise, and IoT. New T-Mobile’s increased investment and rapid growth--and resultant accelerated roll-out of 5G services--also will stimulate thousands of additional jobs throughout the U.S. economy." That's again in stark contrast to both historical precedent and Wall Street analysis, which claims the deal will, sooner or later, result in the loss of anywhere between 10,000 and 30,000 jobs as the new, bigger company slowly purges redundant employees. Meanwhile Sprint and T-Mobile also continue to insist that they can only truly deliver fifth-generation wireless if merged, despite repeated, previous claims by the same two companies that they would individually have no problem deploying complex, impressive 5G network builds. "This proposed merger is necessary to accomplish a goal critical to enhancing consumer welfare in this country: the rapid and widespread deployment of 5G networks in a market structure that spurs rivals to invest in a huge increase in capacity, and, correspondingly, to drop tremendously the price of data per gigabyte," the companies say in their filing. "New T-Mobile will be able to leverage a unique combination of complementary assets to unlock massive synergies in order to build a world-leading nationwide 5G network that will deliver unprecedented services to consumers, increasingly disrupt the wireless industry, and ensure U.S. leadership in the race to 5G." Telecom consumers are no stranger to empty promises when it comes to broadband and media mergers. And you'd be hard pressed to find a merger in telecom over the last two decades where the pre-deal promises even remotely matched the post-deal reality. Consumers were informed Charter's $89 billion acquisition of Time Warner Cable and Bright House Networks would result in faster, cheaper, and better service, only to ultimately deliver higher prices and even worse customer service. Similarly AT&T and Comcast have completed merger after merger promising a universe of benefits, only to deliver higher prices and what's broadly considered some of the worst customer service among any industry in America (and dropping). The closest thing to a legitimate argument for Sprint and T-Mobile's merger is that Sprint can't survive on its own. But even if that's true (and no, Sprint's failure is not guaranteed), there's plenty of potential partners for Sprint should the deal be blocked on anti-competitive grounds, with plenty of companies, including Charter, Comcast and Dish, with an eye on potential wireless sector expansion. Deals that wouldn't reduce overall competition in an already competitively-challenged space. Like Charlie Brown and his damn football, Americans are bizarrely gullible to pre-merger promises of utopian synergies. Time after time we're promised the world by companies looking to merge, and time after time we find that these deals only benefit company investors and executives, resulting in fewer jobs and higher rates. By every indication, we're collectively eager to repeat the trend yet again. Like Charlie Brown and his damn football, Americans are bizarrely gullible to pre-merger promises of utopian synergies. Time after time we're promised the world by companies looking to merge, and time after time we find that these deals only benefit company investors and executives, resulting in fewer jobs and higher rates. By every indication, we're collectively eager to repeat the trend yet again.







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Most recommended from 85 comments



buzz_4_20

join:2003-09-20

Biddeford, ME 39 recommendations buzz_4_20 Member Mergers don't create jobs... real jobs anyway. Mergers create a lot of work for a few months, then they usually get rid of a few thousand employees en masse since 1 company doesn't need 2 of everything.



Its ALL ALWAYS BS. Roadkill

Premium Member

join:2008-06-17

united state 17 recommendations Roadkill Premium Member No way No how I think even a 10 year old kid could see the blatant bullshit these two companies are flinging. I can't see any way the redundant employees are going to keep their jobs. I also can't see how lack of competition within the industry is going to work out as better prices and quality of service for customers.

Anon7504c

@104.129.196.x 10 recommendations Anon7504c Anon States and Tax Breaks So they merge. If a state gave a tax break to one of them and workers are laid off then the tax break should be null and void and the company should return all the tax savings with interest. Lets say 22% APR or what ever the company charges for late payments.



Fair is fair and wrong is wrong. Two wrongs don't make it right but three rights make a left. davidhoffman

Premium Member

join:2009-11-19

Warner Robins, GA 6 recommendations davidhoffman Premium Member Sprint-Tee Mobile merger I worry about the huge Sprint debt T-Mobile will acquire from merging with Sprint.

Anon82f4b

@rr.com 6 recommendations Anon82f4b Anon "Americans"? "Like Charlie Brown and his damn football, Americans are bizarrely gullible to pre-merger promises of utopian synergies."



Nonononono. *Regulatory agencies* are bizarrely gullible to pre-merger promises of synergies, because they've been stocked with people primed to look the other way and not think about it too much. NashGuy

join:2015-12-21

USA 6 recommendations NashGuy Member Sprint's future without T-Mobile I get the opposition to this merger but it's worth considering what Sprint's future (or lack thereof) will be if *somebody* doesn't acquire or merge with them. If not T-Mo, who's it going to be? Sprint is in a pretty bad spot these days. They're losing customers and don't have the cash to really make the investments necessary to get their network competitive with T-Mo (much less Verizon or AT&T), and that's just considering 4G LTE, never mind trying to deploy a decent 5G network too. If this merger with T-Mo is denied, then what happens? Sprint slowly dies and goes out of business, offering consumers lower prices but inferior service on the way down? And then Sprint's assets are sold off piecemeal while all of their employees are laid off? Yes, that scenario is still a ways off but I don't think it's out of the question. I used to think maybe Dish and Sprint could merge, given all of the spectrum that Dish has, but Dish doesn't really have the cash necessary to build a nationwide 5G network either. So you have two companies holding a lot of spectrum licenses but without the cash or game plan to use that spectrum very effectively.

supernac

join:2003-03-26

Springfield, MO 5 recommendations supernac Member I'm guessing all of the anti merger folks have never used sprint If you had you would know how sub-par the network is. Sprint can't deploy volte due to how poor its lte network is. 3g is still a thing with sprint, want to leave the city or four lane highway? Welcome to 1x!



Even beyond the network issues dealing with sprint as a provider is a nightmare. Sprints website is a joke, pretty sure it was designed in the 90's. Want to swap sim's? Got to call or go to a store. Want to BYOD? Lol good luck. But in six months sprint will be the leader in 5g, it's always six months with sprint. amungus

Premium Member

join:2004-11-26

America 3 recommendations amungus Premium Member How fun



Every sentence is great. This one is kind of fun:

"Similarly AT&T and Comcast have completed merger after merger promising a universe of benefits, only to deliver higher prices and what's broadly considered some of the worst customer service among any industry in America (and dropping)."



More jobs. So, T-Mobile will gain some Sprint employees. There. Now T-Mobile employs more people. Right? (/sarcasm)



Sprint is also bigger than just wireless. »



If T-Mobile gets all that on top of wireless, and is controlled by a foreign entity (front page today: »



Then again, Verizon partnered with Vodafone.



Total mess. All of it. Great writing here.Every sentence is great. This one is kind of fun:"Similarly AT&T and Comcast have completed merger after merger promising a universe of benefits, only to deliver higher prices and what's broadly considered some of the worst customer service among any industry in America (and dropping)."More jobs. So, T-Mobile will gain some Sprint employees. There. Now T-Mobile employs more people. Right? (/sarcasm)Sprint is also bigger than just wireless. » en.wikipedia.org/wiki/Sp ··· erations If T-Mobile gets all that on top of wireless, and is controlled by a foreign entity (front page today: » www.multichannel.com/new ··· -company ), what's that mean for the wireline operations? How does (any of) this already work with SoftBank? I thought they were well past 25% and all the way up to around 80% owners of Sprint?Then again, Verizon partnered with Vodafone.Total mess. All of it. AppFarmer

join:2016-05-24

Salinas, CA 3 recommendations AppFarmer Member Charlie Brown is sure to kick that ball now that 5G is on the line or we're all blockheads dylking

join:2001-07-31

Saint Paul, MN 3 recommendations dylking Member fool me once... fool me as many times as you want, apparently