The T-Mobile and Sprint merger is finally pushing through, after the Department of Justice approved the deal on Friday, July 26.
This merger, which reduces the number of the major wireless carriers in the country from four to three, is a controversial one that critics have been debating for a long time. Now that it's approved and confirmed, here are the important points about the major merger of T-Mobile and Sprint.
About The Merger
The two American phone carriers have been trying to unite their companies for years, after trailing the top two carriers in the market: AT&T and Verizon. However, federal regulators have been resisting for fear of creating less competition and higher prices.
One of the terms of the deal is the sale of Sprint's prepaid wireless assets to Dish Network, which is a satellite television provider that's now expected to build another wireless carrier.
Critics of the merger say that the union of two giant companies typically lead to higher prices for services that do not improve, as well as cost thousands of people their jobs. Meanwhile, supporters point out that the quality of T-Mobile and Sprint services will become better as a result of a broader combined network.
What It Actually Means For Everyone
T-Mobile is poised to absorb the Sprint brand, so Sprint subscribers should expect to become T-Mobile after the merger becomes official. Sprint prepaid customers will transition to becoming Dish Network customers.
With one less competitor in the market, anylysts expect prices for wireless services to begin rising slowly but surely, whether it's for T-Mobile/Sprint, AT&T, or Verizon. Dish Network may be one of the major players in the future, but it could take years before it becomes a significant competitor.
Chetan Sharma, who is an independent consultant for the carriers, explained to New York Times that prices rose slightly in India after mergers that decreased their large carrier companies from six to three.
"The merger would harm all wireless users through higher prices and diminished competition between the remaining three national carriers," S. Derek Turner from the consumer-advocacy group Free Press explained in a statement.
On the other hand, it's possible for the wireless service quality to improve, especially for Sprint that has the smallest and least effective network of all four major carriers. If T-Mobile and Sprint combine their networks successfully, the subscribers of both brands will be able to access a broader network that can go up against their big competitors.
One last obstacle stands in the way of the merger: a pending lawsuit seeking to block it, filed by 14 states attorney general.
