T-Mobile CEO says combination will prompt increased 5G investment by AT&T, Verizon
As company executives work Washington D.C. circles to develop support for the proposed merger, T-Mobile US and Sprint are making their case for regulatory approval with a joint public interest statement filed June 18 with the U.S. Federal Communications Commission. The bottomline, according to the companies, is a merger will enable the combined company to accelerate investment in 5G, which will, in turn, force AT&T and Verizon to follow suit resulting in reduced network operational expenses that can be passed to down to consumers.
T-Mobile US CEO John Legere laid it out in a blog post, arguing that consolidation among Tier 1 operators will increase market competition rather than reduce it. Noting T-Mobile US’ successful growth strategy, executed through a series of “Un-carrier” promotional deals, Legere said, “Verizon and AT&T are still massively dominant. Even after our merger, Verizon and AT&T each have market capitalization that are more than double T-Mobile and Sprint combined and they control about two-thirds of the market share along with 70% of wireless revenues. This merger is about creating a company that can truly compete for the long term with the massive incumbents, who are getting bigger every day. And, the merger is needed for us to compete against new entrants like Comcast, Charter, DISH and others – as wireless, broadband and video converge.”
In the public interest statement, submitted to the FCC by attorney Nancy Victor of DLA Piper Global Law Firm, the network and spectral integration will come with a $40 billion investment. Sprint subscribers will get expanded LTE coverage and T-Mo customers will see service benefits related to expanded spectrum holdings. According to the document, “By 2024, the New T-Mobile network will have approximately double the total capacity and triple the total 5G capacity of T-Mobile and Sprint combined, with 5G speeds four to six times what they could achieve on their own. In the face of this challenge, Verizon and AT&T will need to respond with improved and accelerated 5G network investment and deployment to the betterment of all consumers and the country.”
Marcelo Claure, former CEO of Sprint and now executive chairman of the carrier and COO of majority shareholder SoftBank, went on a tweetstorm this morning highlighting the benefits of the proposed merger, including job creation related to the network build as well as the broader economic development associated with job creation, and improved access to cellular services in rural America.
In a corresponding blog post, Claure wrote, “5G is the single most important American infrastructure project of our lifetimes.  Upgrading American wireless networks to 5G technology will have massive impacts on the U.S. economy and its competitiveness in the decades ahead…By bringing together the complementary combination of Sprint’s capacity and T-Mobile’s coverage, we can deliver the first and best nationwide 5G network – faster than anyone, cheaper and with less impact to LTE connectivity.”
