Southern District of New York judge Victor Marrero is allowing T-Mobile US and Sprint to merge. This is bad for you if you’re a customer of either one. But it’s great for them. Here’s how it happened and why it sucks.
Why it’s bad:
- Shrinking the national wireless carrier pool down from four to three providers would decrease competition and create higher prices for consumers if the deal were approved. (A group of state attorneys sued on this premise, the judge rejected it. Doesn’t mean it won’t happen)
- There were actual text messages and emails between TMobile and Sprint executives saying the merger will help raise prices.
- The Judge wrote, “…it is highly unlikely that New T-Mobile executives (…) would do a commercial about-face, and instead pursue anti-competitive strategies.” (pg 161)
Basically, the Judge decided that everyone who has an opinion on this is biased, and is just going to let it go through. It’s the equivalent of saying, ‘no one really knows, screw it, here’s a ruling.’
Who is this thing good for?
- Deutsche Telekom. The parent company of T-Mobile US has been trying to unload T-Mobile for years. They wanted to sell it to AT&T back around 2011. That merger wasn’t approved. It forced TMO to compete and actually become a stronger company.
- Sprint. Sprint backed WiMAX before LTE became a competitor, poured billions on the fire, and then had to switch over to LTE. They are backed by Softbank, who themselves, poured billions on fire at Sprint and recently at WeWork.
The Germans get to get out of the US, something they’ve longed to do for ages. The Japanese (Softbank) get to take over the successful rep that John Legere has brought TMO, with his very vocal outbursts at ATT and Verizon, and willingness to shake things up with consumer-friendly plans. (Sorry, Dan Hesse, who I will remember as the best public face Sprint ever had).
Unfortunately for the consumer, don’t expect to see more Uncarrier moves that actually help you. Mike Sievert is taking over for Legere, and he lacks the antics to rail at the competition. He’s an operations guy, who probably isn’t going to do bold Uncarrier moves.
Dish, the satellite TV provider (and a competitor to AT&T’s DirecTV) gets to take over Sprint’s Boost Mobile. Dish-Boost will use TMO’s existing network for 7 years, much like an MVNO (mobile virtual network operator) would, after which they split and become self-sufficient.
The idea here is that Dish is supposed to use that time to roll out its own 5G network. There’s no telling if they actually would do this: it’s more profitable to use the MVNO arrangement than it is to do the hard work of physically putting up tower infrastructure.
In the end, this is great for the companies, not so great for customers. In other words welcome back to the status quo.
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