T-Mobile’s Merger With Sprint: Everything That’s Changed 3 Years Later
Three years ago, T-Mobile’s merger with Sprint was finalized, and the nation’s list of top carriers shrank from four to three. At the time, T-Mobile made promises that the merger would be positive for consumers and the larger mobile industry — and though that’s been more true than not, there are still some pledges that haven’t been seen through.
But it also hasn’t led to a worse situation for consumers, at least not yet. Though having three major carriers to choose from instead of four is worrisome for the future (with Dish so far failing to pose a real challenge), competition has kept plan prices relatively stable and even led to big savings on top-tier phones. Carriers have continued to build out their respective 5G networks, leading to new 5G home internet options for people who aren’t connected to broadband (or are looking for an alternative to their traditional cable options). It isn’t the rosiest future, but it isn’t as bad as some critics had feared.
In an April 10 blog post, T-Mobile CEO Mike Sievert trumpeted how far the carrier has come in three years, citing everything from better 5G service to the greater availability of home internet to lower prices for all, even people signing up with other carriers.
Indeed, folding in Sprint’s midband 5G towers has given T-Mobile a lead on 5G, letting it achieve nationwide coverage of more than 200 million Americans with faster 5G in 2021, years ahead of both Verizon and AT&T. T-Mobile has also improved 5G access for rural customers, Sievert said.
T-Mobile piggybacked off its larger 5G network to launch and grow its 5G home internet service. For a $50 monthly subscription fee (if they set up automatic payments), the service offers customers higher-speed connectivity compared with dial-up, costly satellite, or underdeveloped DSL or cable alternatives. Though the speeds aren’t as fast or reliable as those of a good cable or fiber connection, T-Mobile’s 5G service can reach consumers who aren’t hooked up to the highest-speed internet networks.
And as Sievert notes, competition between carriers has kept prices on par — for instance, Verizon’s comparable 5G Home service also starts at $50 per month.
Keeping phone plans low
As far as phone plan prices go, the carrier landscape after T-Mobile and Sprint’s merger has preserved competition in consumers’ favor, at least for the time being. Indeed, carrier discounts and deals have even led to a boom in premium phones, which climbed to up to 18% of the phone market early this year, according to IDC analyst Nabila Popal (up from 10% before the pandemic). Carriers have been desperate to get consumers signed to three-year contracts, so they’ve subsidized most or all of the price for phones like the iPhone 14 or Samsung Galaxy S23 series.
T-Mobile remains one the last of the big three providers to still offer two-year options on most of its devices, a more consumer-friendly deal. (A notable exception are pricey foldables like Samsung’s Galaxy Z Fold line, which requires a three-year commitment to get an upgrade discount.) That said, the carrier has tied some of its best perks and promotions — like free Apple TV Plus and its best device trade-in deals — to a requirement to be on its priciest Magenta Max plans.
On the low end of the price spectrum, T-Mobile did fulfill a premerger promise to offer a $15 per month plan with unlimited talk and text as well as 2.5GB of data, which the carrier has since increased to 3.5GB in compliance with its proposal to increase this cheap plan’s data allowance by 500MB per year. It also has said it’ll keep Mint Mobile’s $15 per month plan should its planned $1.35 billion purchase of the Ryan Reynolds’ owned prepaid carrier go through.
Another major element in T-Mobile and Sprint’s merger proposal was offering low-cost or free data plans; discounted laptops and tablets; and mobile hotspot access to 10 million low-income households. What the carrier branded as Project 10 Million has so far followed through on providing $4.8 billion in services and supplying 5.3 million students with devices through the end of 2022, a T-Mobile spokesperson told CNET.
The carrier hadn’t proposed a deadline for hitting the 10 million marker, but it said the program, which launched in 2020, would last five years, meaning it will expire in 2025. T-Mobile hasn’t said what’ll happen after its commitment period ends.
Merger misses: jobs fall short of promises
T-Mobile doesn’t seem to have fulfilled other pledges made for the merger. The biggest involves jobs, with then-CEO John Legere saying the new combined company would create new jobs and hire 11,000 more workers by 2024. The new T-Mobile started with around 80,000 employees in 2020, according to regulatory filings, but after losing around 5,000 employees in 2021 due to layoffs, along with more jobs shed among network and engineering as well as retail employees, the carrier so far seems to have fallen short of its promise.
When reached for comment, T-Mobile pushed back on the idea that the carrier employs fewer people now than it did before the merger. But it didn’t share exact personnel numbers, saying only that thousands of jobs have been created. T-Mobile also didn’t address whether it’ll make the 11,000-person hiring goal set by Legere.
“Before we merged with Sprint, we said we’d have more employees as a combined company than the two standalone companies would have had on their own without the merger — and we have done just that,” said a T-Mobile spokesperson. In the years since the merger, the spokesperson said, the carrier has also “created thousands of jobs for vendors and partners.”
Granted, the jobs-related proposal was made by a different CEO and before a pandemic led to layoffs and challenging economic conditions across many industries. But the current situation is still gloomier than T-Mobile had originally proposed.
The merger also shifted the balance of power among carriers. In their premerger assurances, T-Mobile and Sprint said they’d divest some of their assets to Dish, turning the satellite TV provider into the nation’s de facto fourth-largest carrier and saving the merger. Dish acquired Sprint’s prepaid mobile brand Boost and has the option to pay $3.59 billion for 800MHz wireless spectrum to form its own 5G network, though it may end up passing on the offer to save money after finishing testing the spectrum. In the meantime, Dish has secured agreements with AT&T and T-Mobile to use their 5G networks while it builds its own.
Though Dish finally opened sign-ups for its 5G service back in August, and launched its own $25 prepaid service in December, progress has been slow to get the carrier in line with the far more established T-Mobile, Verizon and AT&T. For now, Dish isn’t a serious threat to its bigger siblings.
What comes after the merger timeline expires?
The US Department of Justice required a lot of assurances, like those listed above, to approve the T-Mobile and Sprint merger, but they all have expiration dates. This has implications for who’s helped by the new T-Mobile’s plans — like students aided by Project 10 Million, which lasts through 2025, as well as regular consumers through plan pricing.
As part of the merger, T-Mobile agreed to lock in pricing on its plans for three years, though it’s unclear what will happen after. Last year, the carrier introduced the similarly named Price Lock as a broad feature for most of its prepaid and postpaid mobile as well as broadband internet plans, but only new customers qualify.
There are still a few other merger pledges stretching into the years to come. By the end of 2023, T-Mobile must provide 5G service to 97% of the population, and within six years 99%. The carrier must cover 85% of the rural American population by the end of this year, and 90% within six years. But beyond that, it’s unclear what T-Mobile has in store for consumers.
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