The proposed merger between T-Mobile and Sprint is drawing ever closer to becoming a reality, and the United States Department of Justice is currently in the process of investigating just how the deal may affect smaller carriers like MNVOs, especially those who use T-Mobile and Sprint’s networks. Authorities are worried that the $26 billion merger deal could result in higher prices and other woes for MNVOs, which may then be passed on to customers. The two networks combined reportedly have sway over a grand total of 54-percent of the prepaid wireless market in the United States, counting Sprint and T-Mobile prepaid customers and the customers of MNVOs who use Sprint and T-Mobile networks.
This sort of process is part and parcel of approving any merger between two large wireless companies, but the large portion of the prepaid market and MNVOs held by the two companies makes this one special, and worthy of a bit of extra consideration in that regard. The fact that T-Mobile is the most popular major wireless carriers among the sub-$75,000 income bracket means that it’s a top priority to ensure that this deal will not cause a dramatic uptick in costs. The same can be said of the fact that Boost Mobile, one of the largest prepaid wireless brands under Sprint, counts low-income customers as some 83-percent of its customer base. This means that this deal holds inordinately large potential to see lower-income individuals relegated to lesser data plans, or in some cases kicked out of the premium wireless space entirely.
While changes in plan pricing are certainly not an inevitability, it is quite possible, and it stands to reason that T-Mobile and Sprint would have to get funding from somewhere in order to execute a joint 5G buildout, especially since the two companies have different plans in that regard. Sprint holds a large amount of high-band spectrum that it plans to use to build out a small-cell 5G network, while T-Mobile wants to use network virtualization and other newer technologies to deliver 5G performance over lower-range spectrum bands that can transmit further and go through buildings and obstacles more readily. The two companies combining their spectrum holdings is a major motivator behind the merger.
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