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5G and the T-Mobile/Sprint Merger How They Are Related and How It Impacts You
There are two big stories in the wireless industry in 2020: 1.) What will happen with the proposed T-Mobile/Sprint merger? and 2.) The continued 5G rollout across the United States. However, these stories, by no means, are mutually exclusive and have many ripple effects, from what it means for the future of the cell tower industry to what will be its impact on consumers regarding their ability to access 5G to how much it will cost.
The following are some scenarios that could take place in 2020:
T-Mobile/Sprint Merger Approved As-Is
The wireless carrier industry would be consolidated into three players of roughly equal size. T-Mobile post-merger would increase network spending in line with Verizon and AT&T, which would result into an immediate boost to revenues for companies like Crown Castle, American Tower and SBA. With one less wireless player, the 5G rollout moves forward at a faster pace with its primary focus on higher-value markets and increases in customer pricing, translating into higher margins for wireless carriers and potentially more investment in tower buildouts.
Merger Approved But DISH Network Becomes an Industry Player
As part of the merger approval, T-Mobile must agree to concessions that would provide DISH Network to gain a foothold in the market. Dish would need certain flexibility to partner with other industry players or access to existing network resources. AT&T, Verizon and T-Mobile look negatively on this outcome, but the cell tower companies are looking at this possibility as a major win. If DISH Network becomes a real fourth player in the wireless industry, then the 5G battle could be on and one result could not only be more access, but more competitive pricing for customers as well.
Merger Rejected-Sprint Finds a Partner
If the T-Mobile/Sprint merger is rejected, then Sprint would be forced to find a partner to maintain viability. Sprint's valuable network and spectrum assets are attractive and could attract suitors like cash-heavy technology players, including Google, Apple or Amazon. Sprint’s partnering could maintain its position as a legitimate player in the wireless industry and would serve as a plus for cell tower companies by avoiding certain downturns that follow an industry player consolidation. Furthermore, Sprint’s survival, via a tech partnership, would fuel the game of becoming the king of the 5G Galaxy, which would most likely benefit consumers by 5G’s faster growth and access and more affordable pricing for related services.
Merger Rejected-Sprint Vanishes
If the merger is rejected and Sprint cannot find a lifeboat by way of a partner, Sprint would fall further behind AT&T, Verizon and T-Mobile. Sprint would continue to lose customers and eventually be forced to shut down operations. Sprint's assets would be sold off and, most likely, only strengthen AT&T and Verizon, the two big players in the industry, and have a negative impact on T-Mobile’s long-term ability to compete. With the wireless industry essentially becoming a two-player game, cell tower companies would be dealt a significant blow. 5G rollout would continue, but access would be concentrated in areas that garner the highest margins for the carriers and pricing for services would be escalated due to the lack of competition in the market.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.