What’s Sprint? America’s Next Dead Brand!

By Mo Islam ’22

T-Mobile and Sprint have had a complicated “on & off again” relationship. For the past few years, there had been speculation that a major merger and or acquisition in the cellular industry was imminent with these two players at the center of it all. Now, just last Saturday, it looks like the delayed merger of Wireless/Data market companies is once again on.

For the companies, this deal is extremely lucrative. The merger is valued at $26.5 billion and goes as far as further consolidating the mobile carrier market. From a financial perspective, T-Mobile’s parent company – Deutsche Telekom – would hold 42 percent of the merged carrier and Sprint’s parent company – SoftBank – will have 27 percent. The remaining 31 percent will be distributed to public shareholders. However, with the merger comes the total demolition of the Sprint brand and a drastic change to the Sprint market. When all is said and done, the average consumer must now wonder, what does this merger mean for me?

Computer scientists and analysts predict that this merger does lead to some benefits on the data side of the spectrum. The combination of two major wireless infrastructure will, in theory, allow the new T-Mobile company to provide nationwide 5G service to millions of consumers. After the merger, the new company would go by the T-Mobile brand as specified, but now serve a total of 126.2 million subscribers across the United States. Currently, the four major players in the mobile carrier industry (AT&T, Verizon, T-Mobile, and Sprint) hold 98% percent of the market while regional carriers share the remaining two. The combination leads to an offset in control and competition to continue, resulting in better deals and lower cost services for the average consumer. Historically, the competitive prices have decreased consistently with improvements made on the products. However, if the merger occurs successfully, the remaining three companies will now have equal pieces of the pie, making competition nonexistent, virtually eliminating all benefits and long-term deals with current customers. Specifically, deals such as Sprint’s $100 multi-family plan, which competes in pricing directly with T-Mobile, could skyrocket in price. 

Ever since the news of the deal became official, customers from both T-Mobile and Sprint have begun to revolt. They fear the future costs of the new “Mega Carrier” and what they would expect for better service. At the same time, the two companies are still facing opposition from the District of Columbia and 9 other states with regards to their implementation plan. They are making it nearly impossible for T-Mobile to settle all tensions before the December 9 trial run. While a merger would help Sprint avoid dealing with possible bankruptcy, they still have to consider public opinion before taking any drastic steps.

Overall, the merger has been brought into question by numerous sources. The way things are unfolding, the public aren’t going to agree with T-Mobile’s reasoning for the time being. Personally, I believe that this merger will most likely help the American economy greatly. From merging two of the biggest data providers, just with resources and customers alone would accelerate the number of telecommunication jobs and increase the GDP substantially. For the average American customer though, the biggest detriment may come from the increased surcharges that are soon to follow. Despite the public’s disapproval, at the end of the day, people still need the services. Now that the companies have both the DOJ’s and FCC’s approval, it looks like only a matter of time before Sprint really becomes a dead brand in the United States.

Sources:

https://www.cnn.com/2019/11/23/tech/sprint-history-tmobile-merger/index.html

https://www.phonearena.com/news/t-mobile-sprint-merger-new-york-attorney-general-not-backing-down_id120560

https://gizmodo.com/sprint-and-t-mobile-are-officially-merging-and-its-ter-1825638553

https://fox6now.com/2019/11/23/sprint-may-soon-be-a-dead-brand-if-t-mobile-merger-is-approve