Here’s how the T-Mobile-Sprint merger might actually affect you

Another big media merger is a go as the proposed combination of Sprint and T-Mobile has been approved by a federal judge.

Judge Victor Marrero (U.S. District Court, Manhattan) ruled in favor of the telecom companies after an anti-trust lawsuit was brought by a group of attorneys general representing 13 states, led by New York, California, and the District of Columbia. 

The merger had already received the blessing of the Department of Justice and the Federal Communications Commission, paving the way for the deal to go through. Originally valued at $26 billion in all-stock deal, the two sides are likely to do some tweaking and renegotiating to the terms before the deal is finalized, probably in April 2020.

But what does this mean if you’re a customer of one of these companies? How will this affect your day-to-day? 

I’m glad you asked.

The name game

Perhaps the most noticeable change will be all about branding as the newly merged company will continue business under the T-Mobile name. The company’s even got its new website up and running.

Which means that Paul Marcarelli, aka Verizon’s “Can You Hear Me Now?” guy who jumped to Sprint in 2016, will now, presumably, be shilling for his third company in 10 years. 

Better change that shirt again, Paul.

Billing drama?

Prior to the merger, T-Mobile was the third largest carrier (86 million customers) and Sprint the fourth largest (54.1 million customers). The new, combined T-Mobile now leaps into second place with roughly 140 million customers, sandwiched between top dog AT&T (165.9 million subscribers) and Verizon (94.5 million customers). 

You’d think with more wireless competition rates would go down. In fact, in Sprint and T-Mobile’s joint press release, Sprint Executive Chairman Marcelo Claure heralded the new company that would provide “nationwide 5G, lower costs, and a high-performing network that will invigorate competition to the benefit of all mobile wireless and in-home broadband consumers.”

The release also states that the newly combined company plans to offer “the same or better rate plans at the same or better prices for three years.”

With fewer competitors, the big three wireless companies have that much less incentive to keep rates low. 

And higher rates are exactly what those attorneys general worried about when they initially filed a lawsuit to prevent the merger. California Attorney General Xavier Becerra argued, “It’s hard to believe that going from a market with four big competitors to a market with three big companies will provide the amount of competition that keeps the playing field fair for consumers.”

And New York Attorney General Letitia James said at the time of the lawsuit’s filing, “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country.”

There’s also room for concern about rate fixing as Aija Leiponen, professor of applied economics at Cornell University, said in a statement Tuesday: “… The Federal Trade Commission should take care to monitor the pricing and behavior of the combined company and also the effect on pricing of the currently dominant companies. Implicit coordination of prices is easier among three than among four companies.”

5G, baby

Of course, T-Mobile and Sprint are also hyping up the merger’s ability to help build out better 5G coverage for consumers; it’s mentioned 10 times in that press release. Among those mentions is the claim that the new, combined powers of the two providers will yield “14X more total capacity in 2024[.]”

Both Sprint and T-Mobile have already launched their 5G networks, but those networks are still very much works in progress.

And there’s a good reason why both companies referenced the year 2024 and not, say, 2021: Most phones currently owned by users don’t support 5G. Meaning, it’ll take some time for 5G smartphone adoption to catch up to the network build out. 

So get ready to sit back and…wait. And in the meantime, cross your fingers in the hope that your bill doesn’t go up at all.