The Sprint/T-Mobile Merger Is About 5G

Next year, U.S. consumers are expected to consume more data through their smartphones than through fixed broadband. The business jockeying around this anticipated fact has been occurring for some time. If consumers are going to spend most of their time with their eyes pointed at mobile devices, then that’s where content (or programming) must end up. Media and entertainment establishments have the content and have been working a lot of angles for partnerships and mergers with wireless services.

Will all the key players in the U.S. be able to have their “ducks in a row” to take full advantage of the consumer’s preference for mobile? It’s hard to say. The proposed AT&T and Time Warner merger is still in a high stakes legal tussle with U.S. antitrust officials. There is no telling how that will turn out.

Now there is another high profile attempt at merger between two of the “big four” telecoms in the U.S.—Sprint and T-Mobile. If it happens, the resulting new company (reportedly to be called T-Mobile) will leapfrog past AT&T to become the second-biggest wireless carrier after Verizon. The “big four” will become the “big three” and policymakers in the U.S. will have to decide if three is a big enough number for actual competition to occur—the kind of competition that leads to better plan options and lower costs for mobile consumers. That’s what both companies are predicting. But, as usual, telecom pundits have been lining up on both sides. Some are praising the deal as a boon for consumers and others are bashing it as a disaster, especially for folks with smaller incomes. Both Sprint and T-Mobile occupy strong positions in the pre-paid mobile market and it is uncertain what happens to that popular plan option for low income users if the companies are combined.

For T-Mobile and Sprint, the merger is about getting up to scale, ostensibly, to better compete with Verizon and AT&T. But the proposed deal is also about 5G, the new wireless network technology that will offer up faster speeds and more reliable connections on smartphones and other “connected” devices (think Internet of Things). Development is ongoing but 5G networks are expected to launch across the world by 2020, working alongside existing 3G and 4G technology to provide speedier connections that can keep you online no matter where you are.

In addition, the reliability of 5G means new found support for smart devices like autonomous vehicles, telemedicine and other high-tech products that haven’t even been dreamt up as of yet. But it is a costly venture to build out a 5G network. Carriers need to acquire rights to the best airwaves and also must invest in more cell towers and other infrastructure. A combined Sprint and T-Mobile can presumably muster up enough resources to develop a world-class 5G network that’s competitive with AT&T and Verizon. The 5G landscape is still evolving but the race to implement a sustainable and reliable 5G network is on. In the US, you may see the first local 5G networks switched on this year or next and, of course, talk will soon begin about 5G capable mobile devices and the wondrous benefits such devices will provide. It is no coincidence that Sprint just happens to have a 5G model ready for introduction.

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