T-Mobile & Sprint Merger: What It Means

What changes now that T-Mobile and Sprint are one company?

Since April 2018, T-Mobile and Sprint, two of the four major wireless carriers, have been seeking approval for a merger to combine the two companies into one. On April 1, 2020, the merger was completed, creating the New T-Mobile, now the second largest carrier after Verizon

T-Mobile originally announced the merger to the public in April 2018, it was approved by the Justice Department in July 2019, a federal court ruled in favor of the merger in February 2020, and it was finalized on April 1, 2020.

As of right now, both brands will continue to exist separately. Sprint customers don't need to do anything differently, no plan changes have taken place, and their stores and networks are still separate. But eventually, everything from Sprint will move over to T-Mobile.

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

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 says that the merger means current customers could pay less than they do right now:

The New T-Mobile will offer free access to 5G and the best rate plans at low prices, now and in the future, so all customers can reap the benefits of a supercharged Un-Carrier network at a great value. And the New T-Mobile has committed to delivering the same or better rate plans for three years, which includes access to 5G, including for prepaid and Lifeline customers.  

T-Mobile also says that the merger will allow for free 5G access through Connecting Heroes Initiative, which is:

...FREE unlimited talk, text and smartphone data to ALL first responders at ALL public and nonprofit state and local fire, police and EMS agencies...

T-Mobile Connect is already one change that was made around the time of the Sprint and T-Mobile merger. It's $15 /month, comes with unlimited talk and text, and includes 2 GB of data. For $25 /month, you can get 5 GB of high-speed data.

If T-Mobile lowers prices even more, it’s likely that the other two major carriers, AT&T and Verizon, will 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 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.

T-Mobile says that by 2026, the new company will:

...provide 5G to 99% of the U.S. population and average 5G speeds in excess of 100 Mbps to 90% of the U.S. population.

However, from a customer’s point of view, it’s likely that not much is going to change. 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, 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.

Another change coming out of the Sprint and T-Mobile merger involves positioning Dish as the fourth major carrier in the US, essentially taking Sprint's place. According to the Justice Department:

Under the terms of the proposed settlement, T-Mobile and Sprint must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish Network Corp. Additionally, T-Mobile and Sprint must make available to Dish at least 20,000 cell sites and hundreds of retail locations. T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish builds out its own 5G network.

Dish is committed to building a 5G network by 2023 that will be available to 70 percent of the US population at download speeds of at least 35 Mbps. In fact, if they don't follow through, they must pay the government a $2.2 billion penalty.

What About 5G?

All four of the nationwide wireless carriers have been racing to put out 5G as quickly as possible, some having already released the new network in 2019, at least for major cities in the US. However, all of them are still in the process of providing true nationwide coverage.

The New T-Mobile, with its newly inherited resources from Sprint, might at first seem like a win for 5G. Maybe they’ll have a merged and truly 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 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. Just look at this early 2019 filing with the Securities & Exchange Commission, where T-Mobile claims that with Sprint, the two companies could cover nearly 96 percent of rural America by 2024.

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 is now in the fast lane to 5G and will beat out the other two major wireless carriers.