Digital Trend Alert


The New U.S. Wireless Landscape

The New U.S. Wireless Landscape: impact of the T-Mobile/Sprint merger

by Carol Ingley

President, Media Mogul Enterprises

Week of August 5, 2019 through Week of September 2, 2019

Updated August 12, 2019

Digital Trends: wireless, 5G, satellite communications, T-Mobile/Sprint merger


      Change in the Air. Change is in the air in the U.S. wireless industry. A key factor driving this change is creating a new competitive U.S. wireless environment given the T-Mobile/Sprint merger. Starting with some background is handy in a complex industry.

      U.S. Wireless Landscape Overview. According to the wireless association CTIA’s website, “The Federal Communications Commission agrees that the wireless industry is competitive. The FCC has found that nearly 97 percent of Americans have a choice of three or more 4G providers. That’s because there are nearly 100 mobile providers nationwide….”

CTIA Quote on Wireless Competition

     It's a little bit more complicated than that, though. CTIA has about 30 facilities-based wireless service providers in the U.S. as members. Yet, there are only 4 major U.S. players in this category that have national networks. That brings up the subject of the T-Mobile/Sprint merger.

      More than a T-Mobile/Sprint Merger. So far, the merger of T-Mobile and Sprint looks likely to go through, with both the Department of Justice (DOJ) and FCC approval. (There are still objections at the state level that must be addressed, however). The current top four players in the facilities-based wireless providers with national networks are Verizon, AT&T, T-Mobile and Sprint.

Current Major US Wireless Players     One would presume, then, that with the merger, the new top players would be: Verizon, AT&T and T-Mobile (the merged company of T-Mobile and Sprint).  But it’s not that simple. Because the merger itself is controversial, there’s more to it than just T-Mobile and Sprint.

      Controversy. First the controversy: the main argument against this merger would be the shift from four major players with national networks to three major players with national networks in the facilities-based wireless service provider market segment. That more consolidated market would mean that price competition would decrease, according to this thinking. It will be the American consumer who will lose.

      Somewhere along the line, the right number of major facilities-based wireless carriers with national networks is four. This is one of the reasons why this has turned out to be much more than a merger.  Now there’s a new player as a viable fourth competitor. Enter DISH Network, best known for its satellite TV business.

     Transformative Transaction. Should the merger go through, DISH will become a viable fourth competitor in the national facilities-based wireless service provider arena. DISH has entered into an agreement with the Department of Justice (DOJ), T-Mobile and Sprint. It refers to this agreement as a “transformative transaction.”

     As part of this transformative transaction then, DISH will: 1) acquire Sprint’s prepaid businesses and customer; 2) acquire a portion of Sprint’s 800 MHz spectrum; and 3) gain complete access to the “new” T-Mobile’s network for seven years as detailed by CNET. This will help DISH create a nationwide 5G network that will compete with Verizon, AT&T and the new T-Mobile.

     New Wireless Landscape. The new wireless landscape of 4 major players would then become: Verizon, AT&T, T-Mobile and DISH Network.

Future U.S. Wireless Carriers     So what are the benefits of this new structure?

     Benefits of the New T-Mobile. In May 2019, T-Mobile and Sprint merger won the support of the FCC.To gain that FCC support, the two carriers made a number of commitments  with billions of dollars in penalties if they are not fulfilled.

     The major commitment made was to deliver 5G coverage to 97% of the U.S. population within three years of the merger’s close. Another significant commitment included an offering of wireless home broadband. Wireless home broadband would be a substitution for the current landline options available and will work toward closing the digital divide.

     According to Ajit Pai, chairman of the FCC in a statement released on May 20, 2019, "Two of the FCC's top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity, The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives."

     T-Mobile and Sprint have also said that they, as a merged company, will lock in prices for three years. In July 2019, the T-Mobile/Sprint deal won DOJ approval.

     Benefits of DISH Network as Fourth Viable Competitor. One of the benefits of DISH Network in this deal is that there actually will be a viable fourth competitor.

     There’s quite a bit of background and history as to how DISH Network emerged as this viable player. A statement by Charlie Ergen, DISH co-founder and chairman sums up part of this backdrop: "These developments are the fulfillment of more than two decades' worth of work and more than $21 billion in spectrum investments intended to transform DISH into a connectivity company.”

DISH Transformation

     In short, DISH owns billions of dollars of spectrum and has until March 2020 to use this spectrum. It hasn’t used the spectrum because it hasn’t built its own wireless network. Now, as part of the merger deal, it will have until June 2023 to build a 5G network. It has made a pledge that it will cover 70 per cent of the U.S. population by the June 2023 date.

     Other parts of the merger deal that affect DISH were discussed above (under Transformative Transaction).

     New U.S. Wireless Landscape. This touches on a few of the issues of the emerging new U.S. wireless landscape. As virtually everything goes mobile and wireless, there's a lot at stake for both companies and consumers.

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