100 million people’s phone bills could go up if this T-Mobile and Sprint merger happens.
“The fear is that both Sprint and T-Mobile had been pretty innovative in offering discounted plans relative to Verizon and AT&T,” explained NYU Professor of Electrical and Computer Engineering Dr. Sundeep Rangan. “But there is an issue with price competitiveness. And we’ll have to see whether, you know, three carriers as opposed to four can keep prices down.”
More competition usually means better prices for consumers. If this deal goes through, 3 companies will dominate the entire U.S. market and T-Mobile and Sprint could abandon their famously low prices — but the FCC and Justice Department still have to sign off on the deal.
T-Mobile and Sprint stock sunk on the news, with investors worried the deal will get shut down again. This is the 3rd time in the past 4 years the 2 have tried to merge.
“The problem in the past was that both Sprint and T-Mobile were very good at providing low cost alternatives and keeping price competition, which is really essential for consumers, said Rangan. “So there was a fear that by consolidation might reduce some of those incentives. On the other hand, with the acceleration of 5G and the new administration’s general reluctance to try to regulate too much, definitely you have much better chances now of the merger going through.”