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T-Mobile and Sprints Merger Coverage Map

August 24, 2018

 

When it comes to coverage, the two US juggernauts have a genuine advantage in rural areas, whereas Sprint and T-Mobile are only on par in cities or major roads. Though Sprint is expected to add areas of Iowa, Wisconsin, Vermont, Nebraska and West Virginia to the new T-Mobile's coverage, there are all ready large network overlaps. As a result, the merger is unlikely to create the best US carrier in terms of overall blanketing, that would still be Verizon.

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When the two companies finally combine, T-Mobile will become the largest spectrum holder in the US with a ~30% market share, against 31% for AT&T, and 38% for Verizon, but 50%+ in prepaid. This could be considered an oligopolistic setup by the FCC, and could potentially create regulatory backlash. Overall, however, the merger could also spark healthy competition and even lower prices in the end, thanks to the move over to 5G networks. Analyst Joe Madden stated, "In the telecom market, next-generation technology does a lot more to reduce prices than any other factor. We need to encourage investment in technology, not create the appearance of competition by forcing weak companies to continue limping along."

 

Furthermore, the merger would result in billions of cost savings for the combined company, and thousands of new jobs, according to the carriers. How much? Well, about $6 billion per year, mainly from operating expenses, and at least $2 billion of those are likely to come from the selling, general and administrative costs. 

 

In practice, this means there will be plenty of job losses, too, negating the hiring numbers that T-Mobile is touting, so the employees' situation after the merger is a bit murkier than presented.

 

We only hope that the cheaper plans, as well as the generous phone discounts, will stay after a merger, as the history has shown that the bigger they are, the harder they bargain.

 

 

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