The four largest mobile carriers in the U.S., in order of largest amount of subscribers to the least amount, are Verizon (154 million), AT&T (153 million), T-Mobile (80 million), and Sprint ( 54 million). That being said, the merger between T-Mobile and Sprint would be a very much needed breath of fresh air for both companies, if it actually happens. There are plenty of obstacles preventing Sprint and T-Mobile from partnering up and becoming the “New T-Mobile.” In 2011 AT&T made a bid for T-Mobile, but was blocked by the United States Department of Justice Antitrust Division. This was simply because it was believed that this would have reshaped the mobile industry in a way that would have negatively impacted consumers. In 2014, Sprint tried to buy T-Mobile and was also blocked for the same reasons. I think we can all agree that monopolies are never a good thing in a free market economy. Not only does it limit choices, but it also leads to higher prices because of less competitors. However, this scenario might be a little different. The Department of Justice, the Department of Defense, the Department of Homeland Security, and the Committee of Foreign investment have all already approved this merger. However, there is only one group that hasn’t. The Federal Communications Commission (FCC) is the last roadblock. If they give these two companies the green light, it might actually be a good thing for America and here’s why.
Yeah I know what you’re thinking already. How can consolidating two companies into one be good for the market? Aren’t you eliminating a competitor? Yes, that is 100% right. However, these two competitors combined into one will be able to put pressure on Verizon and AT&T to compete with the new T-Mobile. Essentially, I think you are actually gaining a competitor instead of losing one because the merger would actually make them a more plausible competitor with a substantial customer base. In addition to the increased pressure this would impose on the two mobile giants at the top of the totem pole, the CEO of T-Mobile recently announced that there would be no increase in prices for consumers during the first three years of the merger.
The 5G wireless technology is going to be a relatively expensive project to implement. The infrastructure alone will definitely cost somewhere in the billions. However, if Sprint and T-Mobile merge, they will be able to facilitate this expansion much faster than if they were still standalone companies. Splitting the cost on developing this network on a large scale would definitely be more affordable. Also, T-Mobile will be able to utilize the already existing assets of their new partner company. Sprint already has access to the low-band spectrum, which is a vital component of establishing a 5G network. Therefore, this merger will not only extend each company’s customer base, but also puts them a giant step ahead in the race for 5G. Which means they can once again offer a competitive alternative price to what AT&T and Verizon’s 5G networks will cost consumers.
As we discussed in the previous section, implementing 5G technology is not going to be a simple endeavor. It is going to take a lot more work than building a few cell towers here and there and calling it a day. The signal has a shorter wavelength and will require more devices to transmit the signal over a large area. This means we will need more manpower when launching and expanding the range of the 5G wireless network. More manpower means more jobs. Supposedly 200,000 people will be employed if the merger is accepted. That number is likely to increase as time goes on and companies plan to extend the range of their networks. Let’s be honest, expansion is human nature, so that number is definitely bound to rise.
Maybe it is for the best
Believe me, I am the first person to be skeptical about corporations trying to make power moves and take over the world. That isn’t what I gathered from this story though. This situation feels as if it would benefit society more than it would do harm. Not only would it allow for a more competitive marketplace, help usher in the 5G era, but also create jobs. Unfortunately for these two companies, it isn’t me that they have to convince. Hopefully, they can prove to the FCC that this move will have a positive impact on the public and isn’t just another attempt to monopolize the industry.
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