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T-Mobile and Sprint Merger: What It Means to You

Sep 17, 2019

The pending $26.5 billion merger of T-Mobile and Sprint will likely result in more than just a third major choice of wireless provider. Given Sprint’s substantial portfolio of wireline services, and the sell-off of their prepaid services and spectrum to Dish, approval by the Federal Communications Commission (FCC) will very likely result in significant enterprise disruption in both wireless and wireline services. Since it will also give Dish entry into the wireless services market it will more likely create four major players, not just three.

As recently as five years ago, T-Mobile was fundamentally absent from the business-to-business (B2B) segment, focusing on consumer services. Sprint’s earlier acquisition activity brought them more success in the B2B market for both wireline and wireless services. The merger brings that diverse solution set to T-Mobile, expanding their B2B presence.

Dish may also choose to attack the B2B space aggressively once authorized to offer wireless services under their brand.

Also impacting the outcome will be the executives from both companies who emerge from the merger still in place. Mike Katz, currently Executive Vice President, T-Mobile for Business, started with the company fresh out of college about 20 years ago working in one of their retail stores. Working his way up through the organization, Katz has been a major driver spearheading their B2B initiatives. Combined with members of the Sprint team who have also been successful not only in the government space but the B2B market as well, the combined powerhouse should be very well positioned to create tremendous disruption in these segments.

Technology Merger, Too

Terms of the proposed agreement will require Sprint to relinquish some of its existing network. As they do transitions will need to occur to prepare them for new complexity. Much legacy hardware will need to be migrated. They will need to logically determine how best to migrate end users from legacy 2G Sprint network devices to devices that are compatible with T-Mobile Voice over LTE or VoLTE GSM network. Enterprises must begin to anticipate this hardware migration and begin planning for their hardware migration to newer, more capable technology. Enterprises don’t have to wait for the merger to make this happen and can take advantage of deals Sprint may push to maintain its existing customer base while final FCC approval is still pending. One of T-Mobile’s strengths has been its highly competitive unlimited bandwidth pricing programs. Those prices will very likely have to increase to allow for the cost of these transitions. If they can demonstrate new functional enhancements of value to customers, they may be able to navigate these pricing actions more rapidly.,

B2B and 5G

The merger represents T-Mobile and Sprint joining forces to plan and roll out new 5G services together. In the consumer space the anticipated high price tags on early user devices may be prohibitive, or at least limiting.

In the B2B space, the questions surround use cases. What will B2B organizations be using 5G for beyond simple point-to-point communication? What partnerships will be required to enable these use cases? Many organizations don’t yet have enough information to know where their applications of 5G will take them.

In one example, T-Mobile has been working closely with organizations that we interact with on both the consumer and B2B level every day. Their innovation center and traveling 5G road truck that frequents conferences across the country are packed with use case examples that will drive the adoption of 5G into reality. Early examples from T-Mobile partnerships and expos have featured drone delivery capabilities, connected trucks and more edge-based experiences, where traditional services have required a facelift and 5G has been positioned as the technology to lead that change.

Then there’s the question of 5G as a replacement for wi-fi. Obviously, this would disrupt the entire internet access market. The key issue is making the replacement more cost-effective and price-attractive than the current solution.

Brave New World

As with any dramatic shift in any major industry the possibility is created that rates will fall to increased competitiveness. With a connected world centered around AT&T, Verizon, T-Mobile/Sprint, and Dish, competition will clearly heat up, benefitting all consumers of communication services, residential and commercial.

No different from any other service, the key is in what it does not what it is. Keep your eye on what T-Mobile and Sprint introduce as they move forward after approval. Work with MDSL to continue gaining insight into applications of newer technologies combined with the joint innovative might of these two long-lived industry leaders.

Related reading > What Enterprises Should Start Thinking About as 5G Moves Toward Becoming a Reality

Written by Andrew Hartwyk