About 2 years ago Sprint and T-mobile announced a potential merger of $26 billion. This would be between the 3^rd and 4^th largest mobile service providers in the US, only leaving us with 3!! Scary.

Potential Bad News for us….

A merger could result in prices hikes, poor connectivity and terrible customer service (only looking at history of mergers, however Sprint and T-mobile say otherwise).

This merger promises: 

• 90 % of Americans will have access to 5 G network in 6 years
• Rural parts of America will have faster service in 3 years

Now if they do not meet these promises they face a penalty of $2.4 billion. However, this is unlikely since they Sprint has been working on a mid-band 5G network which works in many places, but not too well in rural America.

Here’s what US regulators have to say:

FCC Commissioner announced, “we’ve seen this kind of consolidation in airlines and with drug companies. It hasn’t worked out well for consumers.” (Reuters)

BUT there is a divide.

FCC Chairman, Ajit Pai is supporting this merger, which has sent Sprint shares up by 23.2% , and T-mobile shares up by 5.1%.

The U.S Justice Department is skeptical about this merger as this reduces competition amongst the service providers (Reuters). 

What happens if the U.S approves this deal?

The U.S could lead in building 5 G network, a race they are on with Chinese companies.

PLUS…..

This deal is extremely important for Sprint as it risks going out of business (Yahoo Finance). no deal, no Sprint (sob)

At the end of the day, whether this deal is approved or not, we may still end up with only 3 service providers.