Opinion: Sprint Merger Doesn't Guarantee 5G Leadership For T-Mobile

T-Mobile and Sprint on Sunday announced their blockbuster merger deal that's been on and off for years now, having reached an agreement on an all-stock $26.5 billion consolidation that will see the combined entity valued at some $146 billion. The joint announcement centered on 5G, arguing how the deal is the only way for the United States to pioneer the fifth generation of mobile networks, much like it did with 4G, claiming the two companies together can offer what Verizon and AT&T can't - nationwide 5G coverage in a timely manner. To call that assertion optimistic would probably be an understatement seeing how neither T-Mobile nor Sprint is presently at the forefront of the stateside 5G race, even though a merger will certainly help them compete in a lot of ways.

Granted, the firms were careful not to directly claim they'll actually be the first to offer nationwide 5G, with their promises mostly revolving around an "unprecedented network capacity" the tie-up is meant to ensure, yet even the very implications they're making when claiming Verizon and AT&T can't scale up 5G buildouts as quickly as they can together are dubious at best. In essence, the idea to combine T-Mobile's 600MHz holdings with Sprint's 2.5GHz spectrum is sound and would surely help the duo be competitive in the stateside 5G race. The actual performance of that hypothetical network is something that's still in question, though no initial 5G infrastructure is likely to offer massive leaps in that regard. As per T-Mobile's own VP Karri Kuoppamaki, initial 600MHz-based 5G may only be 25-percent faster than 4G LTE. Things get better when you add Sprint's 2.5GHz holdings to the equation and both Verizon and AT&T are also unlikely to massively break mobile records with their first buildouts either, but nothing on this front suggests T-Mobile can count on 5G leadership just because it's acquiring its smaller rival.

Verizon and AT&T repeatedly pledged to offer nationwide 5G coverage by 2020, with T-Mobile and Sprint doing the same, yet somehow the merger of the smaller two national carriers is supposed to make their better-funded and larger rivals fail to meet that goal, or imply all four have been lying until this Sunday when T-Mobile and Sprint magically figured out how to honor their vows. Even combined, Sprint and T-Mobile still have less spectrum than either Verizon or AT&T on their own and Legere's pledge to invest $40 billion in 5G over the next three years only seems impressive until you realize Verizon and AT&T spent approximately $63 billion each since 2015 and 5G buildout plans are only now taking shape, meaning their largest infrastructural investments of the current era are yet to be made. Again, a merged T-Mobile and Sprint would certainly be better than the sum of their parts in terms of 5G capex but that doesn't guarantee they would outdo their two richer competitors in that segment either.

Furthermore, there's the issue of efficiency given how the carriers said they'll continue pursuing their 5G buildouts independently while the merger proposal is being reviewed by stateside regulators. As they aren't expecting the process to be concluded before the first half of 2019 (which is also an optimistic forecast), they'll have to participate in the FCC's millimeter-wave spectrum auction in November not knowing the outcome of their attempted tie-up. Unless they manage to do so jointly, T-Mobile could end up with a lot of unnecessary spectrum on its hands should the consolidation be approved and it still moves ahead with buying significant volumes of mmWave holdings it originally planned, which is spectrum it probably wouldn't need if it had access to Sprint's 2.5GHz portfolio.

All of this means two things; one, T-Mobile and Sprint are right to claim that a consolidation would help them compete with AT&T and Verizon, both in 5G and other segments. Two, that still won't necessarily make them larger or better-equipped to handle 5G than either firm and it certainly won't make them 5G leaders in any aspect by default. Could the duo end up being at the forefront of stateside 5G deployment efforts if the newly proposed merger is approved and even deliver the highest-capacity national 5G network in the country first? Possibly, but claiming that "AT&T and Verizon cannot rapidly build nationwide 5G" compared to the combined entity is frivolous, especially since joint buildouts won't begin for at least another year. After all, T-Mobile has been saying it will offer national 5G coverage by 2020 for a while now and is already building an experimental network in 30 cities this year, having pursued such ambitions long before the Sprint deal was close to materializing, so is the new rhetoric meant to imply it was lying? That it was never able to hit the 2020 target without Sprint? The likely answer is "no," though many questions are raised about the long-term viability of its 600MHz holdings in the context of 5G. Such low-band spectrum certainly accelerates deployment as it allows radio signals to travel over longer distances on their own and have greater penetration capabilities (read: reduces the need for small cells), yet it can hardly take on mid-band and mmWave frequencies in any other performance aspect head-to-head, unless combined with another type of spectrum. So, while T-Mobile could still probably do 5G on its own, it will likely be able to deliver a much better solution with access to Sprint's spectrum and infrastructure, which is what this deal is all about. That, and putting Sprint out of its misery.

Ultimately, both Verizon and AT&T will be commercializing 5G as early as this year, whereas the latter is even planning to launch a mobile service despite the fact that there are still no contemporary smartphones that support the technology, though until they launch in early 2019, consumers will be able to use 5G "pucks." Will initial deployment be limited? Absolutely, but T-Mobile and Sprint won't be launching nationwide 5G overnight either. To quote T-Mobile's own CTO Neville Ray, 5G won't make "one iota of difference" over the next two years and 4G LTE will still be the name of the wireless game in the near term, whereas the fact that T-Mobile and Sprint finally made friends doesn't somehow invalidate everything Verizon and AT&T accomplished in terms of wireless R&D so far, it just helps them rival those achievements with uncertain results. All things considered, buying Sprint doesn't guarantee 5G leadership for T-Mobile; it simply provides it with a solid fighting chance that it would hardly have otherwise. It's a massive statement of intent and could potentially truly allow the new T-Mobile to boast the highest-capacity 5G network in the country, but that's far from a given, especially if Washington ends up taking its time with reviewing the proposed deal as time is working against the carrier and both Verizon and AT&T will have ample maneuvering space to prepare for the threat of their rivals uniting, both in regards to 5G and other segments.

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About the Author

Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]