A Sprint, T-Mobile Merger Remains a Very Bad Deal for Consumers The long-rumored Sprint, T-Mobile merger is finally getting closer to fruition. Reuters notes that the two companies have had a "breakthrough" in negotiations on a mega-merger, and are "close to agreeing tentative terms" on a deal that could be completed by the end of October. Regulators previously blocked an earlier attempt at this same transaction due to the fact it would seriously harm competition in the wireless space, but most analysts believe the Trump administration and FCC boss Ajit Pai will happily approve the deal.

That could prove problematic for not only wireless prices, but the recent resurgence in unlimited data plans. While wireless carriers still often engage in theatrical non-price competition more often than not, the government's decision to block AT&T's acquisition of T-Mobile several years ago helped spur an unprecedented period of competition in wireless (something large ISPs and their policy armies like to ignore). The end result was a brasher and more competitive T-Mobile, who lead the way on a wave of improvements in the sector culminating most recently in the return of simpler, easier unlimited data plans. The government's decision to block Sprint from acquiring T-Mobile helped keep that competition intact, something large ISPs and their policy folk would similarly like you to forget. As a result, T-Mobile has added more customers per quarter than any other wireless carrier for several years running, as the resulting competition put an end to numerous, nasty industry tactics including overcharging for international roaming, to obnoxious fees and long-term contracts. And while the new, combined company will likely still be run by current popular T-Mobile CEO John Legere, the very act of eliminating one of only four major players in the wireless market will indisputably reduce the incentive to more seriously compete on price, and could help reverse the progress the sector has seen in recent years. It's well within reason that this reduced competition could also bring back metered plans and put an end to unlimited data. Meanwhile, Sprint's balance sheet and network performance has notably improved over the last few years courtesy of deep-pocketed Softbank. The company also has other options (being bought by Charter, Dish or Comcast) that wouldn't involve eliminating a major wireless competitor, making the argument that this deal is essential to keep Sprint alive (one you'll see floated a lot in the coming months) rather flimsy. Especially when the net result will again be less competition, and less incentive than ever to seriously compete on price, network quality, and customer service. Of course should the final details of the deal be hashed out, prepare to be inundated with an endless flood of "non profit" and other industry-backed editorials insisting that killing one of just four major wireless competitors in the market will be of immeasurable benefit to everyone. That ignores decades of history, which repeatedly makes clear that these types of deals always benefit just one party: the companies involved. The blind adoration of mindless M&As in the telecom space is the primary reason we all get to enjoy what passes for customer service from the likes of Charter or Comcast. Given that Legere has spent the last few years convincing the public he's a massive consumer advocate (despite the company's Given that Legere has spent the last few years convincing the public he's a massive consumer advocate (despite the company's failure to support net neutrality and that time Legere attacked the EFF ), watching him try and sell this dog of a deal to Millennials should prove entertaining.







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Most recommended from 52 comments

Valen

join:2004-12-19

Canonsburg, PA 25 recommendations Valen Member Mergers are never, never good for the consumer Name me one merger that actually benefitted the consumer? These mega-corporations need to be disassembled instead of allowed to grow larger and larger!

GOD666

join:2017-03-10 11 recommendations GOD666 Member Only if T-mobile leads I am not saying I would support a merger, as I do believe competition is very important and we only have competition when people have choices.



The only way I see this ever being even a remotely a positive is if T-mobile was to lead this, as opposed to having Sprint rule this. At which point it would be an improvement for the services and features for the Sprint customers (who make up a minority of those serviced). T-mobile has proven they usually get it right (no company is perfect) and they are clearly better than Sprint. The fear I have is Sprint coming in and taking over T-mobile in which case, we're all screwed, because time and time again, they (Sprint) have proven not to know what is best for both their company as a whole and their customers.



Again, I am not saying I would support a merger, as I do believe competition is very importance and we only have competition when people have choices. With that said, I would prefer the two stay as individual companies.

davidc502

join:2002-03-06

Mount Juliet, TN 7 recommendations davidc502 Member I think they are forgetting the flip side of this issue Since the at&t T-mobile attempted merger, there has been more competition between the 4 main carriers (Mainly T-Mobiles aggressive promotions)... What's running through my mind, is since competition has increased I.E. pricing and what you get with it, these companies can now go back to the FCC and state the following... See over the past 2 years there's been a lot of competition, and now there should be no reason to deny our mergers. Not that this current administration really cares about it because I'm not sure they do.

Economist

The economy, stupid

Premium Member

join:2015-07-10

united state ·AT&T FTTP

6 recommendations Economist Premium Member I agree whole fartedly T-Mobile does not need Sprint's massive debt as TMo has a boatload of debt on their own. I know the spectrum might be attractive, but it is not worth $30+ billion plus Sprint's ongoing losses (with the 'as often as Halley's Comet' swing into profitability).

obeythelaw

Premium Member

join:2003-04-16

Warren, NJ 5 recommendations obeythelaw Premium Member I find it odd... that the only reason the failed ATT merger/take over of T-Mobile a few years ago worked out is because John Legere was hired. It takes vision to do what T-Mobile has done. Believe me, it wasn't competition that kept wireless companies from price gouging for years. They were screwing the customer for years before John Legere took the helm. With John Legere in charge of a new merger, I don't see how you can expect to get anything less than what we've become accustomed to with the current T-Mobile. The CEOs of Verizon and ATT could have done all of what T-Mobile has done but they chose not too. There are hundreds of MVNOs out there. I say give Legere the power to take control of Sprint and T-Mobile and see what he can do.

cb14

join:2013-02-04

Miami Beach, FL ·Localphone

·Zadarma

·Verizon Wireless

·callwithus

·T-Mobile

·AT&T U-Verse

·Callcentric

5 recommendations cb14 Member Very bad deal but the devil will be in the detail If Son gets any significant influence on the operation of the new company we are all toast. But even in the case that DT remains in charge it will be a bad deal for the consumers. The experience shows that reduction to three national carriers does not work well for the consumers ( forget MVNOs), Germany is a good example for that.

With the customer numbers close to that of Verizon and more than ATT there will be no need to compete and the massive debt will require to gouge the customers in order to pay their debts and to satisfy the investors.On the top of it the gigantic task to merge two incompatible networks. Slyster

join:2015-01-08

Sugar Grove, VA 5 recommendations Slyster Member Only if.. T-Mobile has to be the one calling the shots. Otherwise this is going to end badly. Mikeysama

join:2007-08-14

Lady Lake, FL 3 recommendations Mikeysama Member ism's Just remember, disagreeing with a special interest's bought opinion is racism/sexism/etc.