T-Mobile/Sprint Merger: A Sure Thing or Doomed to Failure?
Over the weekend of April 28, 2018, T-Mobile and Sprint announced their plans to merge their operations. Between the two telcos there are considerable synergies. As of the end of 4Q 2017, T-Mobile had 17.1% of the 425 million subscriptions in the U.S. market, while Sprint secured 12.6% of the market. While there would be some subscriber churn during the merger, the merged telco would have approximately a 29.7% market share. Verizon Wireless has a 35.5% market share, while AT&T is just behind with 33.4%. It is not just the aggregate subscriptions that would make the merged T-Mobile/Sprint telco attractive but also the complementary spectrum holdings. Sprint holds almost 60 billion MHz-Pops of spectrum, while T-Mobile holds approximately 35 billion MHz pops of spectrum, but, crucially, Sprint holds a remarkable ~25 billion MHz pops of Educational Broadband Service (EBS) 2.5 GHz spectrum, while T-Mobile holds ~14 billion MHz pops of 600 MHz and 700 MHz spectrum. The merged T-Mobile/Sprint entity would become a serious heavyweight contender in the U.S. market. But will the merger go ahead? Will the Federal Communications Commission (FCC) and the Justice Department give their nod of approval, or will they resort to the courts to block the merger?
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