T-Mobile and Sprint agree to merge

T-Mobile US Inc. and Sprint Corp. are poised to combine in a $26.5 billion merger, creating a wireless giant to compete against industry leaders AT&T Inc. and Verizon Communications Inc., according to people familiar with the deal.

https://www.bloomberg.com/news/articles/2018-04-29/sprint-t-mobile-said-to-agree-to-combine-in-26-5-billion-deal

Another roadblock to the deal could be regulatory hurdles. Sprint's and T-Mobile's first round of merger talks ended in 2014 after the Obama administration expressed antitrust concerns about the deal.

It was not immediately clear how the Trump administration would view the combination. AT&T agreed to acquire U.S. media company Time Warner Inc (TWX.N) in October 2016 for $85 billion. The U.S. Department of Justice has sued to block the deal over concerns about the companies' pricing power in the media market. AT&T and Time Warner are currently defending their deal in court.

https://www.reuters.com/article/us-sprint-m-a-t-mobile/sprint-t-mobile-merger-talks-back-on-control-key-sources-idUSKBN1HH2RR

Just left sprint for cricket, which uses atts network, and loving it so far for the better signal and being $35 a month. That's less than half if what I paid at sprint and I get 5gb vs sprints 3gb.

Would this affect competition in the marked drastically?

@horgen: It would reduce the major network providers from 4 to 3.

Yeah, but would that reduce competition? The fact that we're already only talking about four major providers speaks to that I think. Furthermore, the fact that most cell towers/cell sties are shared between the carriers and that breaking into the industry requires a lot of construction and technological investment (read: cost) speaks to the effect of competition on the industry, i.e. there isn't much. I think it's time to start talking about cell service as a public utility. If it worked for landlines, why not use it with cell phones now that they're more ubiquitous than landlines?

@theone86: It definitely reduces competition, but how much is an open question. Typically each marginal competitor lost deals a larger blow to the amount of competition as the number of competitors gets lower, but of course circumstances vary.

Myself, I've been concerned about the number of competitors in the industry for a while. Seeing that reduced further won't do anything to alleviate my concerns.

@mattbbpl: I guess what I'm really getting at is what effect does a new company breaking into the industry have? Typically they just lease sites from the major competitors anyway, they're not doing a lot of construction, so it doesn't really do anything to push the industry to make a better product. And yes, I guess you could say it would increase congestion on already built cell sites pushing the bigger companies to make more cell sites, but how does having three big carriers instead of four change that? If market concentration is a problem in the cellular industry then we're already past the point where it's done the most damage. If that's the case, then I don't think blocking the merger would have any effect without also breaking the larger companies up.

Oh. We had a similar thing happening in Norway recently, though a completely different business. Companies behind the grocery stores. The result here were actually increased competition... However you could say it came because because someone threatened to chop off their hands.

It could work out for the better in US. I do think it requires active use of anti trust laws, and perhaps changing the game field so new companies can enter and compete.

@theone86: I'm not really sure what you're getting at, tbh. I thought we were mostly in agreement, but I'm confused about the line,"Typically they just lease sites from the major competitors anyway," as Sprint and T-Mobile have their own networks (which differentiates them from mvnos like Cricket which lease network capacity and spectrum from the big 4). That line combined with the comment about leasing sites makes me question whether you're including mvnos in this discussion?

@horgen: If you don't mind, I'd appreciate details of that case. In nearly all cases of such consolidation, the long term natural effects are decreased competition, although short term scrambles in the aftermath are common. Of course, if your phrase above implies "forced" competition then that would explain much.

"The U.S. has opened a probe into alleged coordination by AT&T Inc, Verizon Communications, a telecommunications standards organization and potentially other providers to hinder consumers from easily switching wireless carriers, a person briefed on the matter said on Friday".

https://www.cnbc.com/2018/04/20/reuters-america-update-3-u-s-said-to-investigate-att-verizon-over-wireless-collusion-claim-source.html

I remember reading this last week (tangentially related!), anyways this is the 3rd time T-Mobile and Sprint have tried to merged, lets see what comes out of it.

Can't say long term effects. It has only been a couple of years. There was a razzia back in January in some of the grocery store chains. So yes I imply some form of force here.

Basically Norgesgruppen, Coop, and Reitan Gruppen controls 99% of the food sold in Norway through retail. Whatever info I find will be in Norwegian.

@davillain-: Competition has never benefit the business... It's for the customers. (unless I've completely misunderstood that part). Though with few players, one can ask if there is actually any competition going on.

I don't want to oversimplify it, but fewer competitors = less competition, yes? This is not good for consumers.

Strange, I thought T-Mobile had already merged with Orange to form EE, though maybe that's just a UK thing.

Ajit Pai is smiling like the slime he is.

@mattbbpl: Well, way the industry works right now is that there are four big carriers. They do most of the construction of new sites, they build and maintain most of the infrastructure. The smaller companies mostly lease sites from the big four. Say the big four gets cut to three, what happens? You have roughly the same amount of capital being used to construct new sites, it doesn't get any harder for smaller companies to break into the business because they're not directly competing with the big three. I'm not saying that there wouldn't be a noticeable lack of competition as a result of this merger, but right now I'm failing to see how there would be.

Yes but there are smaller carriers as well so it's not like there isn't choices nor competition.

@LJS9502_basic: The mvnos aren't really competitors to the mnos. More like partners or customers.

Does that give me better service cause T-Mobile sucks

I'd rather not see them merge, to be honest.

@horgen: I don't think it will. Sprint is the smallest major wireless carrier in the US with one of the worst network infrastructure out there. T-Mobile is the 3rd largest wireless carrier and with the merger they might become number 2, but they definitely won't topple Verizon. The fact that T-Mobile doesn't offer any military or veteran discounts means that they will lose some business.

Oh yeah, that's exactly what this already monopolistic market needs...

You think competition in the business would increase with the merge? Would it benefit customers?