Wireless

3 Ways the T-Mobile – Sprint Merger May Affect You

Wireless Merger
What the T-Mobile-Sprint merger means for you

Lawmakers are questioning how the proposed T-Mobile–Sprint merger would affect U.S. consumers. Here are three ways combining two of the industry's biggest disruptors could change your wireless options and bills.

1 Washington Questions the Merger

Washington is questioning the impact of the T-Mobile-Sprint merger on consumers in the United States. On January 24, five US Senators sent a letter to the Senate Commerce Committee to request a hearing on the impact of the proposed merger of T-Mobile and Sprint. Although a hearing was already held by the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights in June, the Senate Democrats believe that the Senate Commerce, Science, and Transportation Committee, which is the Committee of jurisdiction over the wireless industry and the FCC, has a responsibility to assess the impact of this merger on consumer choice and competition in the wireless industry. Sens. Edward Markey (D-Mass.), Amy Klobuchar (D-Minn.), Tom Udall (D-N.M.), Tammy Baldwin (D-Wis.), and Richard Blumenthal (D-Conn.) wrote:

“The merger of T-Mobile and Sprint would reduce the number of national wireless carriers from four to three. This reduction in competition raises a number of important questions that the Committee should address. Since the merger was announced, some have argued that it will lead to harmful repercussions for consumers such as higher prices, fewer choices, and less flexibility in switching carriers. For example, both T-Mobile and Sprint consistently offer competitive products that have exerted pressure on AT&T and Verizon to offer more consumer-friendly data plans and eliminate restrictive long-term contracts. We should examine the impact of combining these two disruptors into one mega company.”

The Senators have legitimate concerns. Here are three ways that the T-Mobile – Sprint merger may affect you:

2 Fewer Options

Currently, consumers only have four wireless carriers to choose from, and this merger effectively decreases this even further. Additionally, a T-Mobile – Sprint merger would prevent new competitors from entering the market. A combined T-Mobile and Sprint could potentially deny competitors wholesale access to their network, basically eliminating new entrants’ ability to compete in the market.

3 Higher Prices

As separate companies, T-Mobile and Sprint drive competition in the industry by challenging more established carriers like AT&T and Verizon with cheaper plans. If the merger is approved, the combined company will have less incentive to keep their prices lower. In fact, once the company becomes a corporate giant, it will likely pay a lot more attention to profit than it will to customer satisfaction.

4 Greater Burden on Lower-income Americans

Currently, T-Mobile and Sprint are direct competitors in offering pre-paid services. If the merger is approved, the new company will control over 50% of the pre-paid market and will have much more incentive to raise prices. This could adversely affect low-income consumers who would have far fewer wireless choices.

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Frequently Asked Questions

How would the T-Mobile-Sprint merger reduce competition?

The merger of T-Mobile and Sprint would reduce the number of national wireless carriers from four to three. Both companies currently offer competitive products that have pressured AT&T and Verizon to provide more consumer-friendly data plans and eliminate restrictive long-term contracts, so combining these two disruptors into one mega company removes a major source of that competition in the wireless industry.

Why did Senators request a hearing on the merger?

On January 24, five US Senators sent a letter to the Senate Commerce Committee requesting a hearing on the proposed merger. Although the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights held a hearing in June, the Senators believe the Senate Commerce, Science, and Transportation Committee, which has jurisdiction over the wireless industry and the FCC, has a responsibility to assess the merger's impact on consumer choice and competition.

Could the merger lead to higher wireless prices?

Yes. As separate companies, T-Mobile and Sprint drive competition by challenging established carriers like AT&T and Verizon with cheaper plans. If the merger is approved, the combined company will have less incentive to keep prices lower. Once it becomes a corporate giant, it will likely pay much more attention to profit than to customer satisfaction.

How could the merger affect lower-income Americans?

T-Mobile and Sprint are currently direct competitors in offering pre-paid services. If the merger is approved, the new company will control over 50% of the pre-paid market and will have much more incentive to raise prices. This could adversely affect low-income consumers, who would have far fewer wireless choices.

Would the merger make it harder for new carriers to compete?

Yes. A T-Mobile-Sprint merger would prevent new competitors from entering the market. A combined T-Mobile and Sprint could potentially deny competitors wholesale access to their network, basically eliminating new entrants' ability to compete in the market and leaving consumers with even fewer options.

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Lawmakers are questioning how the proposed T-Mobile–Sprint merger would affect U.S.

Washington is questioning the impact of the T-Mobile-Sprint merger on consumers in the United States.

The Senators have legitimate concerns.

Currently, consumers only have four wireless carriers to choose from, and this merger effectively decreases this even further.

As separate companies, T-Mobile and Sprint drive competition in the industry by challenging more established carriers like AT&T and Verizon with cheaper plans.

Currently, T-Mobile and Sprint are direct competitors in offering pre-paid services.

If you want to fight the corporate giants, let the Sharks help.

The merger of T-Mobile and Sprint would reduce the number of national wireless carriers from four to three.

On January 24, five US Senators sent a letter to the Senate Commerce Committee requesting a hearing on the proposed merger.

Yes.

T-Mobile and Sprint are currently direct competitors in offering pre-paid services.

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1 Washington Questions the Merger.

4 Greater Burden on Lower-income Americans.

Frequently Asked Questions.

How would the T-Mobile-Sprint merger reduce competition?.

Why did Senators request a hearing on the merger?.

Could the merger lead to higher wireless prices?.

How could the merger affect lower-income Americans?.

Would the merger make it harder for new carriers to compete?.

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