After several years of rumors and discussions, T-Mobile and Sprint executives finally reached an agreement to merge the two carriers, now referred to as the “New T-Mobile.” If the $26.5 billion deal is approved by the U.S. Justice Department, this could bring a stream of changes to the more than 100 million customers on both networks.
T-Mobile CEO John Legere will keep his title, and Sprint CEO Marcelo Claure will serve on the board of the new company. Softbank, which owns Sprint, also has a stake, with CEO and Chairman Masayoshi Son serving on the board as well. Aside from internal structure, we took a look at a few ways how this merger will affect you, ranging from an improvement in overall 5G wireless technology to pricing, and more.
Better cell service
Since the deal has to be approved by antitrust regulators, there will be few immediate changes for both T-Mobile and Sprint customers. If the two merge, customers could potentially see greater coverage, reliability, and speed — especially in rural areas. Sprint customers will be migrated over to T-Mobile’s network, but the process could take up to three years.
Both companies will work independently for now until further notice, but at least one deal will take effect even if the merger doesn’t go through. Both carriers have come to a roaming agreement, where customers will jump onto the T-Mobile network if Sprint’s network is unavailable (and vice versa). It’s unclear when the Justice Department will announce its decision on the merger, but the four-year roaming agreement goes into effect immediately.
Since Sprint uses the CDMA standard and T-Mobile uses GSM, you may need to upgrade your device to utilize this roaming deal. There are a lot of phones, 20 million on Sprint specifically, that work with both networks, and can take advantage of this new arrangement now.
Your phone bill
In a press release, Legere pointed out the merger isn’t a case of going from four wireless carrier companies to three — but for consumers, it is. It means one less option to choose from when deciding on the right carrier for you, and it means carriers won’t be as aggressive when competing with one another. How does that affect your phone bill? It’s too early to tell, and while both carriers promise lower prices, it doesn’t necessarily mean that’s what will happen.
Federal regulators blocked a merger deal between T-Mobile and Sprint back in 2014, and it enabled T-Mobile to start an aggressive price war, with a host of enticing new deals and packages for consumers — such as an unlimited voice, text, and data plan. The rest of the carriers soon followed suit. Without that kind of price competition and fresh deals, it’s tough to see how the new T-Mobile will keep prices lower.
A key part of the merger is the move to 5G networks. The new T-Mobile claims it could provide speeds up to 15 times faster on average by 2024, in comparison to T-Mobile’s current network. The idea is to utilize T-Mobile’s low-band 600MHz and Sprint’s 2.5GHz to create a high-capacity network in the U.S. This may speed up the 5G rollout, but it’s unclear just by how much.
The graph above — from analytics company Mosaik — illustrates what the spectrum holdings would look like across the U.S. if the merger were to go through. Essentially, the The New T-Mobile would have more than 200MHz in some areas, with the lowest around 60MHz. Meanwhile, Mosaik’s map shows that Verizon varies from 50 to 150MHz across the country. The amount of spectrum a carrier holds can effect how strong the network is, so if it has more spectrum then it can provide its customers with better service.
Another graph by Mosaik shows comparisons among all the major carriers. It’s clear the New T-Mobile could govern most of the spectrum, whereas AT&T would trail closely behind in second, with Verizon coming in third.
At this year’s Mobile World Congress, T-Mobile announced 5G service would roll out to 30 major cities including New York, Dallas, Los Angeles, and Las Vegas in 2018. The 5G network will use the carrier’s LTE spectrum, and will work once you’re within range. Meanwhile, Sprint announced it would roll out 5G in Atlanta, Chicago, Houston, Dallas, Las Vegas, and Washington D.C. Sprint also introduced plans to use Massive MIMO antennas to deliver 5G, and will also use LTE as the network’s foundation, with 5G picking up in areas where it’s available.
The new T-Mobile claims to be able to “light up a broad and deep 5G network faster than either company could separately,” and faster than AT&T and Verizon. There are several hurdles it will still need to go through, as the 3GPP has yet to approve specifications for stand-alone 5G networks.
Updated on May 1: Added graphics to illustrate how the merger will effect spectrum holdings.
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