SoftBank Close to Announcing Merger Deal for Sprint, T-Mobile

Mobile carrier consolidation has been one of the major failures of antitrust regulators. Looking back to the Sprint&#x2F;Nextel merger, plans and pricing both declined in customer value severely in the months after the merger closed, with in-plan minutes going from the thousands down to the hundreds for the same price.<p>I would strongly prefer that any consolidation such as this be allowed only if one of the firms return all of its spectrum licenses to the FCC to be re-auctioned. It&#x27;s fine to merge to consolidate infrastructure, but the unfair aspect of market power is derived from the natural scarcity of spectrum.<p>The hardware cost of launching a mobile carrier in an urban environment is falling rapidly, so only spectrum scarcity is preventing upstarts from disrupting the most lucrative urban markets.

I&#x27;m going to voice an unpopular opinion.<p>I think this overall is good for consumers, and good for business.<p>Sprint is woefully under capitalized, neither T-Mo or Sprint have as much PCS Spectrum (read, they don&#x27;t have enough) in the largest markets as either AT&amp;T or T-Mobile. Because of this (and some other factors relating to economy of scale) neither T-Mo or Sprint is really truly competitive (on performance) with either AT&amp;T or Verizon outside of a few selected markets.<p>Our Mobile Phone networks are expensive in the US - but thats largely a function of how much coverage you have to provide to places where (nearly) no-one lives.<p>Figure a cell site costs $1000+ a month to keep it on the air - and Sprint alone had 20,000 cell sites when I was inside their network last in 2015 - so 20 million a month just to keep the sites on, that doesn&#x27;t cover backhaul, CO&#x27;s, trunking, staffing or any of the other costs to keep a network up. Verizon and AT&amp;T each have more coverage than sprint does, and 2-3 times the sites - they also have many more sites that on a good day might see 2-3 subs roam thru.

I agree that this sounds terrible. Tmobile is revializing the mobile world. I love love love all the things that tmobile as been doing. They&#x27;ve not bought all that low frequency tv white spaces spectrum, there&#x27;s a good chance they will continue to force the other major players to improve and lower prices.<p>They have been ending the horrible contract system, taking customers with their innvoation. I love being able to use my phone internationally. I don&#x27;t see how much good can come of this. sprint is just going to be an anvil around their feet, with debt service to paying off the sprint owners holding tmobile back. This is what at&amp;t and verizon want probably.

What effect would such a merger have on cross-carrier solutions like Project Fi, which uses both Sprint and T-mo networks? I&#x27;m worried that the new T-Sprint masters would deem Fi to be undesirable competition to whatever internal scheme they&#x27;re mulling to join the networks.

I’d rather the big two were broken up but this merger will give T-Mobile and sprint all the incentive to price just like the incumbents but give them the resources to maybe get to network parity so that regardless of what carrier you’re on you will have the same coverage. Once that’s the case then you could really put the three against one another and get decent rate in your phone bill. I’d rather competition did that as well by having many smaller players but the system isn’t healthy.

This is a cultural&#x2F;incentive problem with big companies. They don&#x27;t know how to innovate and are afraid to give up control. So they spend their time and resources on financial engineering, clinging to the old way of doing business. Restructuring and mergers are the only way they see forward, because they would rather increase profits by replacing employees and removing choice for consumers than by innovating.

Nice! Now I&#x27;ll be able to move in and out of reception twice as often!

I’m curious what Deutsche Telekom will do if this happens. They’ve spent most of their time in the US market signaling that they want to leave, but maybe it would be a different story when they’re not in distant 4th.

I’m curious how this would work technically as the two networks use different technology. Plus there must be a ton of overlap in the networks in metro areas

No one has mentioned it thus far, but this could be huge for the Essential Phone, they are now on a real network.

funny how life is. in 2012 Sprint wanted to acquire T-Mobile. Deal goes bust. T-Mobile gets free funds. Funds expansion. Now T-Mobile in a position to acquire Sprint.