T-Mobile-Sprint deal could produce strong 5G competitor
It’s too soon to tell how the T-Mobile-Sprint deal may affect prices for wireless service in the long term, but industry observers agree the merger could produce a strong player in the 5G market.
A federal judge ruled favorably on T-Mobile buying Sprint this week, bringing the merger within a few steps of reality. If the merger does go through, the new company would be known as T-Mobile.
Analysts said how the T-Mobile-Sprint deal may affect the enterprise day-to-day was less clear than what it says about the importance of 5G, specifically in competing with Verizon and AT&T.
Hogler Mueller, vice president and principal analyst at Constellation Research, said T-Mobile and Sprint are slogging through a long wait for approval, with the merger first being announced in 2018 but delayed in part because of a suit filed by 13 attorneys general. If the takeover does take place, he said, Sprint and T-Mobile must work quickly to combine their networks as they try to measure up against A
T&T and Verizon on 5G.
The next generation wireless technology was cited by the Federal Communications Commission (FCC) as the primary reason for approving the T-Mobile-Sprint deal last fall. It found the merger to in the public interest, saying in a press release, “the deployment of 5G networks is a critical national priority that will bring meaningful benefits to American consumers.”
The FCC’s decision was conditional on the new T-Mobile’s commitment to deploy 5G service to cover 97% of American people within three years and 99% of Americans within six years. “This commitment includes deploying 5G service to cover 85% of rural Americans within three years and 90% of rural Americans within six years,” the press release stated.
Mueller echoed the FCC, saying the move could be a positive one for consumers, as Sprint in particular could not afford the capital expenditures needed to stay competitive.
“Together, they should be able to do good things around 5G,” he said. “5G adoption will be key [for the combined company].”
Mueller said, as spreading 5G coverage will require additional infrastructure for all carriers, it may be a great time for a combined Sprint/T-Mobile to start anew.
Better speed, broader network
Frank Gillett, vice president and principal analyst at Forrester Research, said it will take time to determine whether there will be sufficient competition for wireless service. While the merger removes a player from the marketplace, Gillett noted that another company, Dish Network, has pledged to create a network of its own.
The major takeaway from the merger, Gillett said, how this will affect 5G adoption. He believes the merger could put the new T-Mobile in good position to build out a network that “combines the two flavors of 5G.” The two flavors are millimeter wave, which provides greater speed, and sub-6Ghz, which provides a more robust network. The combo will give the new company a short-term advantage, he said.
According to Gillett, the new company’s advantage is biggest with sub-6Ghz service.
“For [millimeter-wave] support … the new T-Mobile will have to build out support over specific areas, just like AT&T and Verizon, since that requires all-new gear,” he said.
In terms of setting up private 5G networks such as in factories or on campuses, Gillett said the new T-Mobile would be in the same position as its competitors; it would vie against Verizon and AT&T to win private wireless service contracts for enterprise equipment.
“For enterprise customers, this should increase the competition and offers around 5G coverage, but [it] doesn’t change things radically in the short run.”