Sprint, and Their Proposed Merger, Take a Hit Today

The Sprint company and the idea of its merger with T-Mobile takes a hit today in the New York Times.

Stop Creating Corporate Goliaths

A little of what they have to say.

Letting T-Mobile merge with Sprint would hurt consumers, workers and the economy

For years, T-Mobile’s chief executive, John Legere, has gleefully bad-mouthed his much larger mobile phone competitors, Verizon Wireless and AT&T, for their high prices and profit margins, and their low-quality service. Decked out in magenta sneakers and T-shirts, sporting long hair like an aging rocker, Mr. Legere promoted T-Mobile and himself to his 6.2 million Twitter followers as renegades — telephonic cool kids.

T-Mobile wooed customers by offering service plans with no long-term commitments, and by paying to free those customers from their old service plans. Rolling your unused data and minutes into the next month? T-Mobile did that, and AT&T and Verizon had no choice but to follow. More recently, T-Mobile vowed to match any discounts offered by competitors.

The fierce competition, and the march of technology, has rapidly reduced the cost of mobile phone service. Since 2009, the average cost of mobile service has fallen by roughly 28 percent, according to the Labor Department’s calculations. In 2017, at the peak of the mobile phone price wars, the Federal Reserve said prices were falling fast enough to meaningfully reduce inflation across the entire American economy.

That’s the beauty of competition. It’s been good for T-Mobile, too. Over the past five years, the company has added more subscribers than its larger rivals.

Now T-Mobile, the nation’s third-largest wireless company, wants to merge with Sprint, the No. 4 wireless carrier in the United States. The combined company would be in the same weight class as the two largest, AT&T and Verizon, with the three companies each controlling roughly a third of the market. Mr. Legere, who scorned the big guys, now wants to be one of them.

The Justice Department’s antitrust division staff has recommended that the federal government go to court to block the merger. That is good advice.

The proposed merger would harm American consumers. It would reduce the choice of service plans, and, over time, it is likely to result in higher prices and less innovation. It would also harm workers in the mobile phone industry, reducing competition for their labor. And it would increase the political power of the combined corporation...

On the one hand, this is coming from none other than The New York Times so it's going to carry some weight. It's certainly going to be on everyone's "radar", so to speak. 

On the other hand, boys will be boys and money buys all, especially in our current national government. This may be a conversation for a while--a few days?--but when all is said and done, the FCC and this administration will do what they will, customers and nation be damned.

Look for the Sprint-T-Mobile merger to go through. We hope not but these things usually don't go for the people.

But thanks, anyway, New York Times, for trying.