Sprint and T-Mobile are getting closer to meeting merger approval with the DoJ, but only if they sell off certain assets in the process, the New York Times reports. Those assets pertain to radio frequencies, airwaves owned by Sprint and Sprint's own Boost Mobile MVNO. If these assets are sold, the Sprint/T-Mobile merger could be approved as early as next week.
Sprint has contacted Dish Network, Charter, and Altice about buying Boost Mobile and taking it off their hands. Boost Mobile is a prepaid service, a virtual network operator owned by Sprint. Boost doesn't do postpaid agreements as Sprint does, seeing that it's a small carrier, but federal regulators fear that Sprint's Boost Mobile, when combined with T-Mobile, could create a headache in the wireless industry as the new carrier could become too large.
The current Sprint/T-Mobile merger is not being met with all approval, however. Just this week, at least ten state Attorneys General, including the New York Attorney General, have filed lawsuits to block the two-carrier merger due to less competition in the wireless space, a common assumption many have in the event of a merger of two of the top four wireless carriers.
Sprint and T-Mobile agreed to a possible merger back in 2017, but T-Mobile has had it difficult making a case for why the merger should happen except that it would allow both Sprint and T-Mobile to compete with the carrier duopoly of AT&T and Verizon. T-Mobile reiterated in 2017 that 5G wasn't really 5G with AT&T and Verizon and that it would ignore the new wireless technology, then made a promise to provide 5G fixed wireless access (FWA) for home users who don't have other internet options in an about-face.
T-Mobile promised then that it could provide a 5G home broadband solution for fifty-two percent of Americans. In other words, T-Mobile decided to aim at bringing 5G to rural areas in large fashion as a way to gain approval with the commission.
At a Sprint town hall meeting for Sprint employees in October 2018, T-Mobile CEO John Legere said that no one need fear the loss of jobs behind the Sprint/T-Mobile merger because job losses only occur when companies are dying to survive; such isn't the case with this merger, Legere said. Former Sprint CEO Marcelo Claure confirmed Legere's statement at the time, saying that Sprint jobs were still a part of negotiations and that Sprint was committed to retaining some jobs post-merger.
And yet, this Spring, Sprint stated in a 47-page letter to the FCC that it needs the Sprint/T-Mobile merger or it just may go under — lacking the network coverage and consistency customers demand as well as the lack of low-band spectrum and its bleeding customer situation.
Legere said that The New T-Mobile, the combined powerhouse of the two carriers, would add 3,000 more jobs to the industry by the end of the merger's first year, and up to 11,000 new jobs by the end of 2024, should the merger go through.
In January, Senate Democrats requested a second hearing with Sprint and T-Mobile over the merger, with fears that a merger could threaten the wireless industry as there would only be three carriers instead of four. The assumption is that, with one less carrier in the wireless race, prices would rise for customers.
Additionally, the Senate Democrats wanted to discuss why T-Mobile needed Sprint in a merger to roll out 5G. T-Mobile said it doesn't need Sprint for that, but Sprint would bring its 2.5GHz spectrum to the table, ideal for a 5G network promising more bandwidth and faster speeds. Earlier this year, T-Mobile reiterated that it would not only roll out its 5G network quickly but also do so at affordable prices for consumers. As for job creation, Legere said earlier this year that T-Mobile would create 1,000 new T-Mobile Team of Experts (TEX) Customer Experience Center jobs right away, with another 7,500 by 2024, along with 600 new stores between now and 2024.
Other fears over 5G include the fear that Sprint would roll out 5G by using telecom equipment from Chinese companies Huawei or ZTE. Both carriers in the merger talks have promised they wouldn't resort to using Chinese telecom equipment by which to roll out their 5G network. The legal assurance to the US telecom team is a blow to Huawei, who had signed some two dozen contracts for 5G network deployment.
One month prior to the request for a second meeting by Senate Democrats, T-Mobile parent company Deutsche Telekom and Sprint parent company SoftBank stopped using Huawei's networking gear on their networks in Germany and Japan. The Committee on Foreign Investment in the United States (CFIUS) says that Huawei's (and thus the Chinese Government's) potential to spy on American citizens and thus, the proposed merger's network, means that they can no longer use said equipment.