T-Mobile is making hail-Mary efforts to get public and government approval of the company’s merger with Sprint. T-Mobile executives say the $26.8 billion deal will lead to $6 billion in cost reductions and an overall better product for customers. Two weeks ago, Chief Executive John Legere told the U.S. Federal Communications Commission that T-Mobile will ensure “the same or better rate plans” for services up to three years post-merger.
Legere’s pledge responds to fears that the merger will lead to higher prices for low-income customers who currently benefit from the prepaid plans offered by the two carriers. Sprint and T-Mobile have long battled over the lower income customer base, and combining the two prepaid services will likely result in higher prepaid fees.
Last April, CNNMoney discussed the probable implications of the T-Mobile-Sprint deal for wireless prices. Following the merger, there will only be three major wireless service providers in the United States — Verizon, AT&T, and T-Mobile. As former FCC commissioner Michael Copps said, less competition almost always means less focus on customer needs. Additionally, T-Mobile has boasted about the company’s ability to deliver 5G to customers post-merger. However, the company’s delivery of 5G may entail updating current operations and playing catch-up with AT&T and Verizon.
One thing is for certain: Switching from 4G to 5G will indeed improve efficiency and welcome T-Mobile — and its customer base — to the era of rapid fast speed and massive capacity on a single device. Many agree that more options, beyond AT&T and Verizon, would be refreshing. However, we are in the era of an unpredictable President Trump, who pivoted from his business-friendly stance and surprised many by suing to block the $85 billion deal between AT&T and Time Warner last year. A national security panel headed by the Treasury Department has already signed-off on T-Mobile’s ambitions to acquire Sprint, but the Justice Department and FCC remain undecided.
For a deal that will likely take three years to merge customers, a three year promise to keep prices the same or better does not seem to be a lofty pledge. But, it may be a convenient one. Here’s hoping the Justice Department doesn’t do the math.