T-Mobile, Sprint Say 5G-Focused Merger Will Lead to 'Cord Cutting'

T-Mobile and Sprint have told the FCC that if it allows their proposed $26.5 billion merger, more American consumers will be encouraged to "cut the cord" on their wired broadband package, thanks to the nationwide availability of a high-speed mobile 5G network from the combined operators.

The operators suggest that the merger could boost the cord-cutting trend as part of their Public Interest Statement (PIS), filed with the Federal Communications Commission (FCC) Monday, which asks the agency to transfer Sprint Corp. (NYSE: S)'s radio licenses to the "new" T-Mobile US Inc. (See T-Mobile to Buy Sprint for $26.5B to Create US 5G Powerhouse.)

Both companies have said a merger would help them "leapfrog" AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) by beginning to deliver a nationwide mobile 5G network in 2019.

"The new 5G's network's speed, capacity, and low prices will allow consumers to 'cut the cord' and use their mobile wireless service as their broadband service both inside and outside the home and pocket the savings from eliminating a costly and unnecessary wired broadband bill," T-Mobile and Sprint said in the PIS. They also promise that the "new T-Mobile" will offer an "aggressively priced" wireless in-home broadband product to compete with "traditional providers." (See Can the 'New' T-Mobile Make America's Networks Great Again?)

Otherwise, the pair reiterated previous claims about the proposed merger in the new statement, namely that the merger will deliver more US jobs, better rural service and lower prices overall.

T-Mobile has previously promised that a blended 5G network with Sprint -- using high, low and mid-band radio spectrum -- will deliver average network speeds of 450-Mbit/s, which is faster than many fixed DSL and cable offerings in the US today. Indeed, the PIS makes it clear that -- if the merger is approved -- the new T-Mobile will be taking on the cablecos as well as its mobile rivals.

Yet AT&T and Verizon are promoting 5G, albeit with fixed 5G tests so far, as a gigabit-speed experience when launched. Both operators have talked of offering gigabit or near-gigabit speeds in initial operators, and both are promising initial mobile services in late 2018 or 2019.

So, although T-Mobile is aggressively pushing a nationwide 5G network as a gamechanger for the "new" operator, much still needs to be sorted out as regards speeds, coverage and -- especially -- pricing for the next generation of wireless services.

— Dan Jones, Mobile Editor, Light Reading

kq4ym 7/5/2018 | 8:55:07 AM
Re: First few pages of FCC filing seems very anti-competitive It did seem a bit shocking to take such a swing at the competion in the filing. I wonder if some sort of "guarantee" might be offered or required when it's promised that "the merger will deliver more US jobs, better rural service and lower prices overall." Easy to say, but not so easy to do I would think.
DanJones 6/21/2018 | 8:58:43 AM
Re: First few pages of FCC filing seems very anti-competitive Yeah, interesting I thought.
Clifton K Morris 6/20/2018 | 2:12:59 PM
First few pages of FCC filing seems very anti-competitive I couldn’t quite tell if the FCC filing was a merger document or a press release. Still, if AT&T and Verizon will be placed at a $1,500,000,000.00 disadvantage as stated in the April 29th merger announcement video, it would basically take a decade’s worth of free cash flow from Verizon and AT&T’s businesses (as reported in annual reports) to raise that amount of money.

The FCC filing makes it look like more like a piñata where any company’s legal team will be able to take a whack at how the merger would affect their business, and get some candy... err... asset divestitures and customers.

Apple lost a book publishing anti-trust lawsuit based on price fixing; and comparative pricing to others in that business. It also raises the barrier of entry for new networks to be built. Overall, very troubling especially because the transaction would have a net effect of providing service that competes with a traditional ISP as well as wireline providers. Additionally, and perhaps DoJ needs to require anti-trust monitoring (like that Microsoft had for over a decade).
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