Sprint and T-Mobile have a new argument for consideration in their bid to merge, positing that the US simply won't be able to keep up with China on 5G without the merger. On its face, the information shared by the duo makes a strong argument that the $26 billion deal could keep the nation in the fight. The associated infographics and data — shared via Sprint — could just as easily point to how far behind the country might be.
The graphics begin by showcasing the relatively low existence of "unencumbered" mid-band spectrum in the US compared to the top, state-sponsored carriers in China.
The argument seems to be that only a merger between Sprint and T-Mobile would allow for a similar level of competition in 2.6 GHz, 3.5 GHz and 4.5 GHz spectrum for 5G. Summarily, only Sprint and T-Mobile — with a combined 130Mhz of low-and mid-band spectrum — could compete with the 133Mhz average spectrum available to Chinese operators.
The second graphic put forward highlights an apparent 50-percent lead in terms of network density held by China and posits that the Sprint merger with T-Mobile would enable rapid expansion to close the gap.
Finally, the two mobile carriers pull the information together into a single infographic in addition to restating claims that the merger would result in approximately $40 billion in joint CapEx compared to China's expected $50 billion over the next three years. More directly, the companies claim the total impact of the merger would couple that efficiency and scaling improvement with a $500 billion economic impact and the creation of three million jobs.
Why this argument and why now?
To begin with, analysts and even the US government have already made clear arguments about how US carriers' focus on millimeter wave bands could ultimately put it behind in the race to global 5G dominance. So it isn't necessarily surprising that Sprint and T-Mobile are focusing on a combination of that spectrum with mid-band spectrum.
Earlier this week, doctors in China were also able to conduct their first-ever deep brain surgery on a patient who was over 1.8-thousand miles away from his patient thanks to 5G too. So recent advances in the use of 5G in China may also play a key role in determining the two companies' approach to arguing for a merger.
As China continues to put the low-latency nature of next-gen networking through its paces, companies such as AT&T and Verizon are only now beginning to roll out commercial wireless 5G and only to very limited portions of select cities. Only minor expansions are planned over the course of the next year and both Sprint and T-mobile are expected to follow similar patterns.
The latter two companies round out their latest argument by pointing out the importance of 5G to the generation of the world's "next Google, Apple, Amazon, and Uber."
Perhaps more pertinent to the reason for a new tact, however, is the fact that changes in party dynamics in Washington are cooling enthusiasm about the proposed merger as well. T-Mobile and Sprint seemed to be well on the way to gaining approval last year and are already in the latter stages of gaining approval but lawmakers are beginning to balk at the idea from both sides of the aisle.
Previous promises notwithstanding
Prior to the new call for approval from Sprint and T-Mobile, the two companies have repeatedly promised an increase in the number of jobs available, better customer service and network coverage, and improvements in competitiveness. That doesn't necessarily change with the new arguments from the pair of carriers but it does put a more direct focus on the current fears spreading among various governing agencies and bodies.
Namely, it shines a spotlight on concerns that the US will not be able to keep up or lead in the race for 5G — a technology with a reach well-beyond simply reducing latency, increasing speed, and improving throughput for mobile users.
Next-generation networks are expected to drive advancement across the entire spectrum of technology from self-driving vehicles to government and public infrastructure. A new wave of technology is predicted to follow too, leading to what is effectively a new era of technological growth. 5G is commonly viewed as a required area of growth for any nation that wants to remain a world leader or key player on the world stage.
All that remains to be seen is whether or not the argument is enough to reaffirm or regain vital support for the two companies' merger.