For a third time in four years, Sprint and T-Mobile are cooking up a plan to combine forces. The two wireless providers are attempting to create one wireless company that will be able to compete on the same playing field as Verizon and AT&T, but so far have been unsuccessful.
A Digital Marriage of Convenience?
When combined, T-Mobile-Sprint would have roughly 100 million subscribers, making it possible for the merged company to finally be competitive against AT&T with 93 million users, as well as Verizon with 116 million wireless users.
In a 2014 ruling against the combo, the head of the Federal Communications Commission was quick to declare that it was necessary to have four wireless providers to ensure enough competition in the market, leaving the two smaller companies out in the cold. But times have changed, as has the FCC chairman.
Investments in 5G infrastructure are adding increased pressure to the situation, since Verizon and AT&T are already pouring in capital that T-Mobile and Sprint may not have available. Since the wireless market has more or less peaked, with nearly every person in the nation using some kind of smartphone or wireless-enabled tablet, the fear is that T-Mobile and Sprint will die a quiet death as neither is capable of offering the new technology fast enough to retain customers.
T-Mobile and Sprint Hope to Cut Costs, Not Employees
Another major concern in any kind of merger like this is the effect it will have on jobs.
The two wireless providers say they plan to add to their team of roughly 80,000 full time employees. The savings they’re anticipating will come from eliminating redundancies like the 35,000 excess cellular transmission sites and overlapping retail stores.
T-Mobile’s current headquarters in Bellevue, Washington will become the main HQ for the combined company, while Sprint’s Overland Park, Kansas site will be used as a secondary headquarters. In addition to the $6 billion in annual savings forecasted, the combined company has pledged to invest $40 billion in their network and business in the first three years of the merger.
Sprint and T-Mobile execs are bracing for another fight, evident from the lack of a break-up fee in the new contract, but a strong enough argument may win the FCC over.