It seems that T-Mobile US and Sprint have been trying to get their merger approved for years. They have been changing who they are and still nothing. Today, T-Mobile is showing growth, as is Sprint, but to a lesser degree. However, when this merger is either approved or denied, these companies will face a tough period of distraction that could take their eye off the ball for years to come. Let’s take a closer look at what investors, users, workers and the competition can expect.
If they are approved to merge, combining the two companies, systems, cultures and more will be a tough challenge. It always is when two different companies come together. These are two totally different companies. Even if down the road the combined company is a success, there will be quite a bit distraction and confusion for the first few years.
Add this chaos to the fact they both have new CEO’s, and the road to the future looks even less certain.
T-Mobile needs wireless data spectrum to grow
If they are not approved to merge, then this opens up a whole new can of worms that both companies and their new CEO’s have to wrestle with.
T-Mobile has been growing in recent years and that is great, however they have very little wireless data spectrum, and I think that will get in the way of continued growth at its current level. That’s why they need to merge with Sprint, who has loads of spectrum to play with.
Sprint faces a larger hurdle. They have loads of spectrum, however even with that asset, they have not been able to rapidly grow. The company faces economic challenges and in fact has done so for many years.
The dream of Masayoshi Son of Softbank who acquired Sprint several years ago simply never came true. Now he is trying to figure out how to make lemonade out of the bucket of lemons he has called Sprint. To make something good out of a bad situation.
Sprint has wireless data spectrum, but slow growth
In fact, I think Sprint will have to take on a more aggressive competitive posture, which they never really have been able to do over decades of trying. They have always been the quiet competitor. They have been honest and should be successful, but they just have never moved the needle.
Either that, or they will have to be acquired by another company to try and accelerate their growth.
Active growth has never been achievable for Sprint whether years ago in the long distance or more recently in the wireless marketplace. They tried, but they never get anywhere.
So, if there is no merger, I think T-Mobile will continue to succeed, but without much spectrum. I also think Sprint will continue to struggle being buried under their mountain of valuable spectrum until finally something happens to release all this energy and grow.
If T-Mobile, Sprint merger not approved, those opposed will not win either
Unfortunately, even merger opponents who want to keep four wireless players in the marketplace will not get what they want with a weakened Sprint. There is a valuable asset, but it is not being used today.
Any way we slice it, the wireless industry continues to grow and change over time. It is a vibrant and ever-changing marketplace.
When T-Mobile and Sprint first announced their intentions to merge several years ago, the wireless industry was a different place. At that time there were really only the top four wireless carriers.
Xfinity Mobile, Spectrum Mobile, Altice Mobile are now wireless competitors
Today, there are several other competitors like the pre-paid services offered by each carrier and other new competitors like Xfinity Mobile, Spectrum Mobile and Altice Mobile.
The industry looks very different with post-paid and pre-paid services. In fact, wireless will continue to expand and grow and change as an industry. Other companies will enter as competitors in this market, even though there are really only four national networks today.
There are also other business networks and competitors like KORE Wireless and others which are also part of the mosaic on the B2B side.
With all that said, most of these other competitors are small time compared to the big four. Maybe tomorrow the wireless marketplace will have more and vibrant competitors, but not yet.
Today AT&T Mobility and Verizon Wireless lead
Today, there really are only four, national, wireless networks for the consumer marketplace and a bunch of small-fry newer competitors trying to carve out a name for themselves.
In today’s wireless marketplace, AT&T Mobility and Verizon Wireless are still the top tier. T-Mobile is next in line even though they are a distant third place. Sprint has fallen to fourth place and continues to struggle.
So, blocking this merger will not keep these four carriers in place. Remember, T-Mobile desperately needs spectrum and Sprint desperately needs more business. So, something has to give.
Whether T-Mobile, Sprint merger is approved or not, wireless is changing
With all that said, allowing T-Mobile and Sprint to merge will at least create a wireless industry with three strong competitors.
What political decision makers need to understand is things simply will not stay as they are today. They always change and always will. Sprint, in order to survive will have to merge with some company. That’s just the way things are.
The wireless industry is changing. The wireless industry is always changing. It has always been this way. In fact, the industry has changed in the few years since this merger was first attempted and will continue to change going forward.
So, our choice seems simple. We can either try and fail to steer the direction of this changing industry by blocking this merger, or we can let the natural industry instincts take over. History has proven we never really get it right when we try and take over and steer a changing industry.
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