T-Mobile & Sprint Merger: What It Means

What will happen if T-Mobile and Sprint merge into one company?

Side-by-side of the T-Mobile and Sprint logos

T-Mobile and Sprint 

T-Mobile and Sprint, two of the four major wireless carriers, are seeking approval for a merger to combine the two companies into one that’s just called T-Mobile.

The merge, announced to the public on April 29, 2018 and expected to be finalized in the first half of 2019, would make it the second largest carrier after Verizon, with its new combined customer count at over 120 million, and a value of around $146 billion.

Although the deal is said to create new jobs, lower prices, and provide better overall cell coverage, there’s still much speculation over how it will actually play out for customers and employees. Will the merger raise or lower prices? Will more jobs be created with a merge or does combining into one company force some employees out the door?

While those things are definitely an important factor to weigh when it comes to a merger of any two companies, this one is primarily focused on accelerating 5G implementation. Both T-Mobile and Sprint have been on track for a similar release date for 5G, but does uniting into one company mean 5G will come even faster...or slower?

Will Prices Change?

T-Mobile’s CEO says that the merger means current T-Mobile and Sprint customers will pay less than they do right now. While we're of course not sure if that will actually happen, it makes sense that with an estimated $6 billion in annual cost reductions, and therefore more money in their pockets, they could lower prices for their customers.

In fact, if T-Mobile lowers prices even more after the merger, it’s likely that the other two major carriers, AT&T and Verizon, would also start offering service at a lower price. If they want to hold on to their customers while T-Mobile slashes prices, they might just do the same.

What Else Will Happen?

Like with any merging of companies, the T-Mobile and Sprint merger means both companies will have more resources than they did before when they were separate entities. We can expect this to translate to accelerated growth in terms of new devices and coverage, but it might not happen right away.

From a customer’s point of view, it’s likely that not much will change after a merger. After some important behind-the-scenes factors are ironed out, Sprint users will be able to use T-Mobile cell towers and T-Mobile users will be able to reach Sprint towers. This means more coverage and likely little to no change in price (at least not higher prices) for existing customers.

The companies have also said that with the merger, they plan to create thousands of new jobs in America. Some or most of these new employees would presumably be hired in rural areas where they plan to widen their infrastructure.

However, if the two companies do become one, their current, combined cell tower count of 110,000 towers will be reduced to 85,000. This involves building 10,000 new towers and cutting 35,000 towers. At the same time, the company plans to increase its small cell tower count from 10,000 to 50,000.

During that change, it’s unclear how that will affect coverage for existing Sprint and T-Mobile customers since most if not all of the decommissioned towers will be ones Sprint owned.

What About 5G?

All four of the nationwide wireless carriers have been racing to put out 5G as quickly as possible, with a release set around 2019 or 2020, at least for major cities in the US.

Let’s say Sprint is on track to release 5G in 2020 and T-Mobile in 2019. If the two companies pool their resources together in a merge, what one company had will immediately belong to the other one. Of course, it’s easy to then see this as a win for 5G. Maybe they’ll have full, nationwide 5G coverage six months to a year quicker than they could have done it as separate companies.

However, that might not be the case.

Since a merger of this scale will likely involve lots of restructuring when it comes to management and workers, not to mention the fact that the two company’s cell towers probably aren’t exactly set up for a smooth transition — and many of the existing towers will be shut down — 5G could be put on hold while other things take precedence.

However, that being said, if 5G is as important to T-Mobile and Sprint as they make it out to be, it’s very possible that their customers could see 5G even faster than Verizon’s or AT&T’s. With more money, employees, and other resources, and a revamp of their cell towers, it’s not unrealistic to think that the new T-Mobile company could be in the fast lane to 5G and beat out the other two major wireless carriers.