Sprint, T-Mobile's Merger To Raise Prices: Consumer Advocates

A merger of Sprint and T-Mobile would raise prices of a number of their plans, particularly low-cost, pre-paid offerings that are most frequently used by low-income individuals, consequently impacting the poorest people in the United States the most, several consumer advocacy groups and other industry members are now arguing. While the third and fourth-largest wireless carrier in the country are arguing their consolidation will increase competition and continue driving down costs, some opponents of the move claim nothing of the sort will happen near the bottom end of the wireless price bracket. Low-income subscribers are hence "likely to lose the most options and face stiff price hikes because Sprint and T-Mobile are the only game in town for them," according to Gene Kimmelman, president of policy advocacy group Public Knowledge and ex-official of the Justice Department's antitrust arm.

Besides having fewer incentives to remain competitive in the low-cost pre-paid market following a merger as they're already dominating that segment, Sprint and T-Mobile may also end up raising prices for smaller wireless carriers using their networks to provide plans that cater to the poorest individuals across the country, according to Stephen Stokols, CEO of FreedomPop. While acknowledging the general market advantages of such a tie-up, Mr. Stokols believes consumers will ultimately be worse off if the merger is approved as "you won’t have competition at the bottom level anymore." FreedomPop is one of several regional carriers who use Sprint's network to provide affordable services to low-income consumers and could see its rental costs spike as a result of the proposed consolidation.

Sprint and T-Mobile remain adamant they will create added competition in the wireless industry by joining forces and being able to directly challenge AT&T and Verizon, both of which are presently much larger than either and would still surpass them in terms of subscribers even when combined. T-Mobile CEO John Legere also pledged to create thousands of jobs through the merger which he's hoping to see completed by the end of the first half of 2019, though many industry watchers are now describing that timeline as highly optimistic.

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Dominik Bosnjak

Senior Writer
Dominik started at AndroidHeadlines in 2016. 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]