A February 11, 2020 article in the New York Times announced that “T-Mobile and Sprint Are Cleared to Merge as the Big Get Bigger” in which they explain, “the long-in-the-works merger would combine the nation’s third- and fourth-largest wireless carriers, creating a telecommunications giant to take on AT&T and Verizon. The new company, to be called T-Mobile, would have about 100 million customers.”
As discussed in our September blogpost T-Mobile and Sprint Merger: What It Means to You, this merger will likely result in a third major choice of wireless providers along with Verizon and AT&T. Since the deal required Sprint to sell off much of their wireline, prepaid services, and available spectrum to Dish Networks, it may result in four major players.
Less than a week later, on February 17, New York dropped out of their attempt to block the merger with a lawsuit. T-Mobile and Sprint hope to complete the transaction by April 1, 2020.
No Delay to the Disruption
While the negotiations have been proceeding, T-Mobile and Sprint have certainly continued to compete with one another, but they’ve also been quietly working together on building out their technology upgrades for the past two years. This should result in a far faster technology transition than AT&T or Verizon anticipate, and deliver some significant competitive advantages that will bring very positive market disruption very quickly.
One large factor in this heating competition is 5G. Verizon and AT&T have been focusing on high-band 5G which is highly interruptible, which results in users losing connection making a turn, or when a large truck passes them.
Narrow band 5G has received praise as the signal that can reach as far as 100 feet underground and can be trustfully deployed without service interruption. T-Mobile, Dish, and Sprint bought at auction a majority of a spectrum of frequencies that were formerly used by TV broadcast with Verizon and AT&T splitting the leftovers and scrambling for greater provisions in the upcoming 2.5GHZ auction. This becomes important when considering how to build out a ubiquitous network for things like autonomous, self-driving cars. With frequent interruptions on high-band and some degree of latency on narrow-band, it is the combination of both with mid-band into a multi-band strategy that makes possible the truly uninterruptible connections and in-memory edge computing needed by these next-generation applications and use cases.
The availability of high, mid, and narrow-band will also accommodate the widely varying geographies and characteristics autonomic vehicles and systems may encounter, providing the network capacity and the data insight to be able to prevent catastrophe. Having passed up the mid-band auction opportunity leaves Verizon and AT&T at a distinct disadvantage.
T-Mobile is currently dominating in the public sector which was the space that sprint had predominantly owned in the past though more recently AT&T had taken a big portion of that. AT&T also won the contract to be the global first-responders network, which really gave them a foothold there.
The last two years have seen T-Mobile for Business grow significantly in that public space. They’ve gone very intentionally into partnerships and relationships with those technology providers that leverage their network to deliver a truly unique solution to the public space. That’s the sort of ingenuity and innovation they’ve really bred within their core base and which will allow them to be successful on the back end of this merger. Additionally, that infusion of attitude and culture into legacy Sprint is really going to re-energize the two organizations and bring them together. Once merged, T-Mobile and Sprint will start talking about a more nimble network. They’ll be able to give developers far more flexibility in what they can accomplish. Then it’s going to be very interesting when you can do certain things that everybody wants to do, but can’t really do too well on Verizon or AT&T.
It will probably be Spring or Summer 2020 before the final convergence will be announced. After that it may take until Winter 2020 before the new T-Mobile is introduced. In preparation T-Mobile has already released their new website after the courthouse decision in an effort to build confidence that they’re ready and demand for the anticipated new services. This merger gives the new T-Mobile immediate credibility as the number two carrier right behind Verizon. The combined company will begin with more subscribers than AT&T.