A mega-merger in the cellphone industry is now in the hands of federal regulators. T-Mobile and Sprint are trying to combine again.
At least one expert says going from 4 main cellphone carriers to 3 means less competition, which usually means higher prices. That’s why this same merger was shot down in 2014, but since then times, technology, and presidents have all changed.
The CEOs of T-Mobile and Sprint put out a joint video talking about all the things they say could happen if they combined into one company.
“A company that will supercharge the Un-carrier strategy and create robust competition and lower prices across wireless, video and broadband,” said T-Mobile CEO John Legere in the video.
However, Quinnipiac University business professor emeritus David Cadden says less competition usually means higher prices.
“If you’re a consumer, you probably are not going to get the deals that you’re getting right now,” Cadden said.
The two carriers first tried to merge 4 years ago, but Obama administration regulators said no, it would bad for consumers.
“That’s when T-Mobile became much more aggressive in terms of getting rid of contracts, extending the amount of data that could occur, so many consumers got a much better deal,” said Cadden.
Both CEOs say once the two companies are combined under the name T-Mobile, they will be able to use their resources to lead the change to 5G. That’s the next generation of wireless network. It uses a much higher frequency, which requires much smaller antennas.
In a city like New Haven, those little antennas can go on light poles, rooftops, even traffic lights, creating a much faster network.
“Just to put this in perspective, the difference between 4G and 5G is the difference between black and white TV and color TV,” said Sprint CEO Marcelo Claure in the promotional video.
“5G is being argued as a major economic driver that could create upwards of 3 million jobs in the United States and half a trillion dollars worth of additional economic benefit,” Cadden said.
Combine that economic impact with the Trump administration’s policy of easing business regulations, and you have Legere and Claure thinking this is a good time to try again to merge.