Sprint to the Front 👟📲
Finally getting together
After four years of flirting, T-Mobile and Sprint have finally decided to tie the knot. In a $26 billion deal, the third and fourth largest U.S. wireless carriers will merge to become #1 in the U.S. with 127 million customers. The two companies have discussed merging for years. Their tech romance has been so prominent that some didn’t believe the merger was real, chalking it up to more talk.
May need a little convincing
There is one major roadblock for Sprint and T-Mobile: they need to convince regulators that the merger is not breaking any antitrust laws and that it is good for consumers and the economy. The companies are trying to sell regulators on the fact that they will invest $40 billion over three years to bring 5G to market and prevent China from dominating the 5G market first.
Gizmodo: Sprint and T-Mobile Are Officially Merging, and It's Terrible
The Guardian: T-Mobile and Sprint agree merger that could cost 20,000 US jobs
Merger critics talk about how this will eliminate competition and force consumers to choose from only three major mobile carriers. AT&T, Verizon, Sprint, and T-Mobile have 98% of all business in the wireless market in the U.S. and this merger will make it difficult for anyone else to compete. In addition, critics say that the merger will eliminate 20,000 jobs, according to the Communication Workers of America union.
Reuters: T-Mobile, Sprint say $26 billion deal would give U.S. tech lead over China
Business Wire: T-Mobile and Sprint to Combine, Accelerating 5G Innovation & Increasing Competition
Merger fans talk about how this deal could result in lower prices, better benefits and has the potential to turn the U.S. into a global leader in 5G. They also say that it will give the U.S. an ‘edge’ over China in creating the ‘next generation’ mobile network, calling it a “force for positive change.” Fans believe the merger will create jobs since the new T-Mobile will need more employees as they scale up their 5G rollout.
Thinking about past mergers
Sprint and T-Mobile are pitching the positive benefits of this merger, but what does history say? In the 1980s, regulators split up AT&T because it had monopolized the market and prices had skyrocketed. Once AT&T was broken apart, healthy competition and freedom of choice entered the telephone market. This was a pattern through the late 1900s, when companies merged, competition decreased and jobs were lost. Although the past does not always predict the future, it may be wise to be wary about the promises T-Mobile and Sprint are making since they don’t always line up with reality.
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