WASHINGTON D.C. — Over the weekend, T-Mobile announced plans to buy Sprint. The merger of the third and fourth largest U.S. wireless carriers would create a combined company with a market share still smaller (29.8%) than the current market leaders, Verizon (35.5%) and AT&T (33.4%).
“This merger probably would have happened years ago if the Obama-era FCC hadn’t been so fixated on keeping four national players in the market,” said TechFreedom President Berin Szóka. “Given Sprint’s steadily shrinking market share and T-Mobile’s modest gains, there’s just no evidence for the idea that having two weak companies in lanes three and four is better for consumers than having a stronger third competitor. Just the opposite: Wireless carriers have already invested hundreds of billions of dollars in their networks, but they’ll have to make huge increases in overall investment to build out the network of small cells needed for next-generation 5G service. Analysts estimate that, by 2026, there will be five times as many 5G small cells as there are wireless towers today. Sprint and T-Mobile have lagged behind AT&T and Verizon in deploying 4G networks. The combined company will be able to keep up far better.”
“It’s absurd to think that any regulator knows better than T-Mobile what the company needs to be a stronger competitor,” continued Szóka. “As a distant number three player, the company clearly has no market power today, so there’s no reason to regulators should second-guess the company’s business decisions. T-Mobile has long forced AT&T and Verizon to lower prices and make other improvements, such as restoring the unlimited data plans they had abandoned. Consumers should expect more of the same from T-Mobile after the merger.”
“While there’s nothing magic about the number four, this merger doesn’t necessarily mean the U.S. will only ever have three nationwide carriers,” concluded Szóka. “Cable companies are currently testing 5G networks of their own. They’ve already built huge wi-fi mesh networks. They may yet offer something that many consumers will consider a viable alternative for one of today’s wireless networks. Google has toyed with, but abandoned, plans to provide 5G service from drones, but there’s no telling what the company, or Facebook, might do in the future. Google’s Project Fi, which resells service on the T-Mobile and Sprint networks, combined with wi-fi hotspots, illustrates how the wireless market is still evolving.”
We can be reached for comment at email@example.com. See more of our work on the wireless industry, including:
- Our statement on the idea of a government-run 5G network
- Our statement on the FCC’s past efforts to speed 5G deployment
- Tech Policy Podcast #205: Who Owns the Airwaves?