T-Mobile-Sprint merger scrutinized during House hearing

john-legere-hearing

Today T-Mobile CEO John Legere and Sprint Executive Chairman Marcelo Claure testified in front of the Subcommittee on Communications and Technology, but they weren’t the only ones testifying.

The panel also included Chris Shelton, President of the Communications Workers of America, who opposed the merger and said that it would lead to higher prices for consumers and 30,000 fewer jobs. He called out T-Mobile’s acquisition of iWireless, saying that T-Mo closed all iWireless call centers and more than 90 pecent of its retail locations. “Trusting Sprint and T-Mobile with American jobs is like trusting a vampire at a blood bank,” Shelton said.

The panel also included Carri Bennet, General Counsel for the Rural Wireless Assocation. Bennet came out in opposition of the T-Mobile-Sprint merger as well, voicing concerns that the merger could negatively effect rural operators who strike roaming deals with Sprint, who offers roaming rates that are “20 times less than T-Mobile’s”. If higher rates are adopted, Bennet claims, rural operators could be forced out of business and rural consumers could lose coverage.

Next in the panel was Doug Brake, Director of Broadband and Spectrum Policy for the Information Technology and Innovation Foundation, who spoke in support of the deal. Brake criticized merger opponents who say that having four carriers are better than three, suggesting that the U.S. wireless market could be more competitive with a combined T-Mobile and Sprint even if it means there are fewer overall carriers.

“A market of three relatively equal-sized companies in terms of subscribers that continue to invest and expand service, capacity, and offerings is a far, far better future than a lopsided market that competes only on price,” Brake said, adding that critics of the deal “under-appreciate the specific spectrum synergies teed up for a 5G deployment”.

Finally, Phillip Berenbroick, Senior Policy Counsel for Public Knowledge, spoke in opposition to the merger. He pointed to the failed AT&T-T-Mobile merger as evidence for why the T-Mobile-Sprint deal should be blocked, saying that it’s similar to the AT&T-T-Mo deal that was blocked by the DoJ which said that that deal would likely lead to higher prices, less innovation, and poorer quality services due to reduced incentives to invest in them. He also said that AT&T and T-Mobile claimed that they couldn’t roll out nationwide 4G LTE networks unless they were allowed to merge, but that both carriers ultimately did so without combining, and that T-Mobile and Sprint will ultimately be forced to build out their own 5G networks due to competition from Verizon and AT&T.

The panel was also grilled by several members of the subcommittee. “I appreciate both executives’ statements that they believe this merger will benefit consumers and result in lower prices, and their commitments to an accelerated deployment of 5G and the promises of expanded rural broadband, ” said Rep. Mike Doyle (D-PA. “However, I’ve seen a lot of mergers in this industry and others, and it’s hard to think of one where consolidation didn’t result in people losing their jobs, prices going up, and innovation being stifled.”

When Doyle asked Legere how this merger was different, he said that the T-Mobile-Sprint deal is a “unique merger” that will result in eight times the capacity for its network along with an 87 percent decline in the price per gigabyte of data and an increase in jobs.

Rep. Bill Flores (R-TX) asked what Legere thinks would happen if the merger isn’t approved, and the T-Mobile CEO said that the U.S. will fall behind in the race to 5G and T-Mo won’t be able to provide home broadband competition.

“I will not be able to, and the United States will not be able to enable its promise on building a world-leading 5G network. What we will create and Sprint will create along with AT&T and Verizon will be inferior to what’s being created in China and in South Korea. That will lead to loss of jobs and economic impact in the country,” Legere said. “I will not have the supply or the capacity to supercharge the Un-carrier. I’ll be able to move forward, but not in the same fashion creating competition. I will have limited if no ability to expand into the in-home broadband and provide Comcast and Charter the competition that they need.”

Claure said that if the merger isn’t approved, Sprint will have limited 5G coverage. The Sprint chairmen added that Sprint will have to borrow money to invest in 5G if the deal isn’t approved, which would lead to increased prices for consumers so that Sprint could pay that money back.

You can watch the full hearing for yourself in the YouTube video above. Legere and Claure are also scheduled to testify at a hearing with the Subcommittee on Antitrust, Commercial, and Administrative Law that was originally scheduled for tomorrow, but has been postponed.

This week, a group that includes several Democratic senators came out against the merger, claiming that it will lead to “dangerously high levels of market concentration” and that it will “likely cause Americans’ monthly bills to jump dramatically.” The T-Mobile-Sprint merger is still being reviewed by the FCC and DoJ. T-Mo and Sprint previously said that they expect the deal to close in the first half of 2019.

Based on everything that’s happened around the merger lately, what do you think its odds of approval are?

Source: House Committee on Energy & Commerce (YouTube)

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  • Brenden Morris

    Former T-Mobile employee here….while working retail stores. Our Managers & leaders were pushing for this merger…its more money in there pockets in terms of Add A Lines due to more customers. But while working at T-Mobile, my t-mobile plan was basically free because all the perks T-Mobile gave me. So more money in management pockets & still basically free T-Mobile plans for employees. Why the hell would you not want the merger as an employee.

    Currently, im not a T-Mobile employee & against this merger 100%. Prices of everything will increase, new fees will arise, the Un-Carrier will turn into Verizon. Lock in your rate plans now, because if this gets approved. T-Mobile leaders and executives will be laughing all the way to the banks.
    There is a reason why there aren’t any more UnCarrier announcements.

    • slybacon

      What’s an un-carrier move that they should announce? What’s the biggest pain about being a wireless customer (with any carrier)?

      • Sharti24

        Bring back unlimited hotspot!

        • slybacon

          Home Broadband will essentially be that, right? If you have home internet with them, why would you need hotspot? Unless you run a mobile office or something.

        • JJ

          I use my phone as a hotspot all the time and it’s unlimited and i can still take calls while staying connected. I only use it when i travel because i have cable at home. If you plan on using hotspot at your house for home internet, we are not there yet. The congestion on towers would be unbearable right now.

        • They already have that. Once you go over they reduce to 600kbps still good enough to stream movies.

        • Robert Roll

          look at the Global 15 add on for $50 i belive it includes unlimited data at lte speeds over hotspot

    • disqus_7XunpanFgK

      They only announce 1 or 2 Un-Carrier moves in a 12 month period. They just did Team of Experts a few months ago. The next Un-Carrier move is likely to be based off Layer 3 TV, but it likely hinges on the merger.
      Maybe you should do a little more research before commenting on a company you seem to know very little about.

      P.S. This merger is all but certain to happen. Look at the previous mergers over the last 2 years since Trump took office. The Democrats can complain, but the FCC and DoJ are pro-merger these days and they have the final say.

      • vinnyjr

        Trump Administration is pro business, this merger will go forward. T-Mobile will expand into the home network market and have the ability to complete with Verizon.

        • StevenM

          …and I can’t wait! Adios Spectrum internet!

        • Dummy Up Meathead

          I WISH I could like this 10 times! Spectrum internet is why I cannot cut the cord in NYC. I have NO other option.

        • mikeZo6

          Tmo will NEVER compete with Verizon stop beleiving Tmo BS
          Tmo is doing very good VZW has tons of money and spectrum and Tmo has no real money or spectrum

        • I’m trying to figure out how Verizon has tons of my money. Last I checked they have 120 Billion in debt due to them buying 100 percent control of themselves. That’s 1 reason why prices are high. 20 access fee is ridiculous per line. And they are pulling out of the Home TV and Broadband market. Parts of they broandband and TV network get damaged and they send out letters saying were not repairing switch providers.

        • mikeZo6

          why is their stock so good then 223Billion

        • Jay Holm

          Umm, obviously a combined Tmo/Sprint will be an inatain threat to the Big 2!!! Both customer base, and spectrum!

        • mikeZo6

          All of Sprints debt too

        • mikeZo6

          I agree ! I changed my view of merge

    • JJ

      Yes, prices will eventually go up, costs are increasing across the board. But if they can guarantee 3 years of no price increase then that should be decent enough. Whether this merger goes through or not, prices will be going up. They already have. My plan that i have, simple choice is no longer available and the plan that replaced it which was changed 2 times already is over $30 more a month. Nothing will stop this. In the end they are a business.

    • mikeZo6

      “There is a reason why there aren’t any more UnCarrier announcements”

      Cause they CAN NOT keep doing UnCarrier that totally for CUSTOMERS now that Vzw and AT&T take Tmo seriously Higher Executives said Tmo is a Business and they were losing tons of money being UnCarrier time to START acting like business then they started turning profits. check the first few years under CEO John made no profits doing that Tmo just CARED ABOUT ADDING CUSTOMER even if they were losing their Shirts and Parent company in Germany wanted to sell Tmo

  • none

    Here is the thing, all T-Mobile/Sprint would have to do is say they would continue to honor current pricing schemes for MVNO’s, and that MNVO would be able to access the combined network…
    Everyone would be happy…

    • riverhorse

      I was thinking this also, or just give those parties a one – two year extended contract.

  • francob911 .

    If this merger gets approved prices will spike up. Aside from that 5G needs to prove that it’s not harmful to human … I read a lot that this new 5G tech will give cancer to humans

    • JJ

      That is a good point about proving it will not be harmful. The problem is people are still allowed to smoke around others and even smoke in cars with their kids which for a fact will cause adverse affects, and nothing is done about that. Priorities priorities….

      • Erick Arroyo

        It’s illegal to smoke in a car with a child in 8 states and two US territories.

        • JJ

          That’s good news. Should be national wide. Not where i live.

    • Red

      Watch out for that chunk of sky over there.

  • mikeZo6

    Good block merge not good for CUSTOMERS…

    • JJ

      Got it, i’m glad you did research and had a discussion on the pros and cons. I just don’t see where you placed the document.

      • mikeZo6

        Comment not good for CUSTOMERS…
        all other pro and cons don’t matter but 2 huge cons
        Job loss and Sprint customer pay less and will be forced to pay Tmo prices.

  • (J²)

    T-Mobile offered without pressure to place a clause on this merger reassuring all that prices will not change for at least 3 years.

    Regardless, the carriers have proven that over time that prices can and will increase once the industry’s rate of progression has been slowed which is due to happen soon if carriers fail to make any real progress with 5G.

    I think the US be open to whatever leads to innovation. This will not happen unless 2 carriers already leading change and driving competition merge.

  • Deadeye37

    I agree with John in that T-mobile probably won’t be able to lead the industry with 5G if this doesn’t go through. Verizon & AT&T will both be rolling out strong 5G networks, but T-mobile will still struggle to catch up unless they can buy a lot more spectrum. Sprint will fall into oblivion, which they’re well on the way to doing.

    Looking down the road a few years, if this doesn’t go through, T-mobile will still be putting up a fight, but it will be harder while Sprint will wither away. IMO, its better for T-mobile to snatch up Sprint now so that there can be 3 strong competitors instead of 2 strong competitors, one small feisty competitor, and one weak competitor that can barely stand up.

    • Jay Holm

      I just Googled how many total customers Sprint has, the number 32.12 million came up, wow, I remember when Sprint had around 55 million or so!!!

      • Tony Chen

        sprint rips you off bad service mutiple disconnects. on your first bill as sprint they double charge you. for example you signed up for $50 unlimited service as new customer right? your first bill comes up as $100 instead thats where the majority of complains are. also many people coujldnt even get their cellphone returned to sprint if they dont like the service, sprint store refused to take the smartphone back, and gives you the run around. they tell you they dont do returns in sprint store, but sprint customer services say you have to return the equipment to the store. eventually 30 days are out and they end up getting charged without refunds given.

        • Jay Holm

          No surprise Sprint has been bleeding customers since 2007. . . I have been with T-Mobile since April of 2013, and am very happy.

        • Michael childers

          I had the same experience. I eventually got them return having to argue with executive relations to get the promised return done. Store absolutely refused with a return policy sign right there that said they would be happy to return
          Sprint is already dead. Joining tmo is their only hope

    • Kevin

      T-Mobile bought a lot of 600 mhz spectrum, why would they not lead in 5g? There is no need for this merger, merger will eliminate a competitor. The 24 mhz spectrum auction is coming up and good opportunity for T-Mobile to win lots of spectrum instead on spending the money to acquire Sprint.

  • mikeZo6

    Remember when Tmo and AT&T merge was blocked and Tmo CLAIMED without merge Tmo WOULD NOT be able too have 4LTE proof is RIGHT THEIR about Tmo BS about 5G cause Tmo 4LTE is pretty dam GOOD without AT&T come on people read between the LINES

    • You have to remember tmobile was a bleeding hog back then poor leadership and they’re parent company wanted to dump them because tmobile was not as profitable. I was for the merger then but I was happy that it didnt happen so many people complain about AT&T

      • mikeZo6

        Merge is Good changed my veiw

    • Mario Martinez

      Y0u got to remember that AT&T cought up 4 Billion dollars to T-Mobile when the merger was denied. Without that 4 Bil T-Mobile would not be anywhere they are today.

      • Acdc1a

        Money AND spectrum. AT&T should have never tried the merger in the first place.

    • Joe

      The reality is that is pretty dam good in the city’s, if you travel it’s good enough to get by for the most part, but definitely not Verizon level. Now that they have 600 mhz they will use a bit of it for lte to fix the rural problem but than they only have a bit left for 5g.

    • corepreacher

      it is good because of the break up ATT had to give tmobile a ton of $$ and massive sprectum holdings and roaming agreements. It allowed tmobile to come back from the dead. There is no such deal in place between tmobile and sprint.

  • vrm

    democrats had no problem in “concentration of power” when the dodd frank bill caused consolidation of already huge banks and pretty much destroyed community banks which were the only ones serving underserved areas (inner cities and rural).

    They had no problem when ACA pretty much consolidated all health care dollars into the hands of a few who were kicking back some of that money back into DNC coffers.

    • The consolidation problem is across-the-board.

      United States of Amazon.

      • teaReactor

        Yeah it is. Though I wish ppl would stop seeing corruption as a blue or red thing.

        Sure, there is the cultural divide that accounts for most difference, but both parties are just as disingenuous and self-serving.

        • vrm

          True. Its in both parties but a lot more in democrats. They have been consumed by socialist fascists who promise an utopia to grab power. Trump has gotten rid of lot of corrupt Rs including Paul Ryan. Lot more needs to be done and I am hoping that will happen.

        • The One

          How did trump “get rid of” Paul Ryan?!? He is clearly still in office.

        • Gardo

          “Trump has gotten rid of lot of corrupt Rs”
          You sir are delusional. Trump has had the most corrupt administration in recent history. Manafort, Cohen, Flynn, Papadopoulos, Scott Pruitt, I can go on and on.

        • teaReactor

          How did we come up with such a uniquely precise measurement of corruption? For me, it’s give and take… r here and there, d here and there… both have their particular shiny objects.

          But let’s continue because “my side” is a shade or so less corrupt than the other. It’s all cut from the same cloth. Americans understand that instinctually at least. Congress has a really really low approval rating. Well, when they (congressfoll) would rather jump at the chance to be on camera before doing their actual job.

    • The One

      The Dodd-Frank bill was designed to protect consumers from an out of control financial industry that caused the great recession. The consolidation of banks would have happened naturally, but the increased rate at which it occurred was an unintended side-effect. That alone is not enough reason to denigrate a piece of legislation that was created to protect you from the next financial crisis. I shed no tears for banks that get purchased by bigger banks. It happens in all other industries as well. Supposedly, republicans believe Capitalism rules everything, so why complain when businesses merge?

  • The merger will be good. T-Mobile holds a lot of spectrum, Sprint has a lot of network capacity. Combine those and you get a good 4G LTE backbone to complement their upcoming 5G network. As long as prices don’t rise I think this is a good thing. Sprint is too weak to compete, their LTE sucks and they don’t have the money to build good 5G.

  • Hector Rivera

    50-50…Anyway The Congress can’t block it. These hearings might be irrelevant.

  • steveb944

    You need to divide up that wall of text before anyone dares to read it.