WASHINGTON — Bloomberg reported early Friday morning that Sprint and T-Mobile have begun preliminary talks to work toward a merger. The deal, if approved, would join the third- and fourth-largest U.S. wireless companies, which together would serve 132 million subscribers.
Both companies have previously explored merging and touted the supposed benefits from their proposed consolidation. However, it is the government’s rejection of such mergers that has produced the most consumer benefits.
The number of subscribers to both companies has grown in recent years following the introduction of service plans priced well below those of the market’s leaders, AT&T and Verizon, as well as aggressive deployment of advanced 4G LTE services.
T-Mobile’s resurgence in particular was driven by infusions of cash and spectrum following the FCC’s rejection of the AT&T/T-Mobile merger in 2011. Sprint too has made a concerted effort to improve its network and compete on price, following the Obama FCC reportedly signaling in 2014 that it would reject any deals that reduced the number of nationwide wireless carriers from four to three.
Free Press President and CEO Craig Aaron made the following statement:
“No one but Donald Trump’s pals on Wall Street wants to see this competition-killing, investment-killing and job-killing merger. There is no rational justification for this deal. It’s motivated by pure greed and a desire to reach deeper into people’s wallets.
“What we know about the wireless market is that customers actually win when mergers are blocked. In recent years, T-Mobile and Sprint have each exerted important competitive pressures on the wireless market, pushing each other and AT&T and Verizon to do things they otherwise wouldn’t — like offering uncapped data plans again and dropping burdensome contract requirements.
“While we need more competition in the mobile-internet market, it's undeniable that these moves have given people more choice and fairer prices. That never would have happened had the FCC approved AT&T’s T-Mobile takeover or signaled to Sprint a willingness to approve a merger like this one in 2014.
“The competition between Sprint and T-Mobile is particularly important for lower-income families, many of whom rely on mobile as their only home-internet connection. If Sprint and T-Mobile merge, prices will spike and the digital divide will widen.
“The legal standard for approving giant mergers like this is not whether Wall Street likes it. Communications mergers must enhance competition and serve the public interest. This deal would do just the opposite: It would destroy competition and harm the public in numerous irreversible ways. So unless Ajit Pai wants his tenure at the FCC to go down as the worst for consumers in the agency’s 83-year history, the chairman should speak out and show us he’s willing to do more than rubber-stamp any harmful deal that crosses his desk.”