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Monday marks the first anniversary of the announcement of the merger between T-Mobile US Inc. and Sprint Corp., while the supervisory authorities of the Department of Justice and the Federal Communications Commission (FCC) are getting closer to the final stages of considering their benefits.
During my tenure on the FCC, I reviewed numerous mergers to determine whether they were in the "public interest", the legal standard that the FCC must use when considering the transactions of regulated companies, such as than wireless companies. Today, I advise T-Mobile as part of its contract and the evidence clearly demonstrates that the merger of the third and fourth largest carriers in the country by subscribers will strengthen competition against Verizon and AT & T and accelerate the creation by Americans of the next generation of wireless services. service (or 5G), and boost the US economy and our global competitiveness.
Regulators should approve it. There's no time to lose.
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Today, Verizon and AT & T account for nearly 70% of the market and 93% of the industry 's cash flow. The combination of T-Mobile and Sprint will create a supercharged sniper, who will still be number three. This newly revitalized third carrier will be better able to compete with the two largest.
This combination will generate cost savings of more than $ 43 billion by 2024 by combining networks, cell sites and the cost of overlapping advertising and marketing. These savings will allow the new T-Mobile to raise approximately $ 40 billion to build its new 5G network and services.
T-Mobile and Sprint alone have neither the national reach nor the financial strength to compete with AT & T and Verizon. If the opponents of the agreement succeed, the deployment of the 5G of both companies will be much more modest and slower than if the agreement were approved. Opponents of the merger essentially defend an industrial policy discouraging competition against the first two.
In addition, approval of the merger will help accelerate the future of 5G America. Europe, Asia and the United States are engaged in a fierce global race to dominate the 5G market, and the outcome is uncertain. Other countries still fear that the United States has beaten them to the finish line of 4G.
In 2014, 4G had added nearly $ 100 billion a year to US economic output and created millions of wireless-related jobs. This has also fueled the economy of applications because tools such as Uber, Waze and Netflix would not work without super-fast phone speeds. Nearly three quarters of global business applications companies are American, according to the CTIA lobby group.
Our rivals are striving to take America out of its perch, to move the cradles of innovation like Silicon Valley, and to reap tremendous economic benefits as 5G grows. Since 2015, China has built about 350,000 cell sites, compared with 30,000 in the United States, according to Deloitte. It's a huge competitive disparity.
In addition, China United and China Telecom may soon merge to create a huge weight of the 5G. And Japan promises to make the Tokyo 2020 Olympic Games a showcase for its 5G prowess.
The approval of the T-Mobile-Sprint merger will allow the new T-Mobile to invest more money in 5G faster, which will result in a competitive response from Verizon and AT & T. As a result, America will literally build its 5G infrastructure faster and more robustly than if the deal were rejected. Opponents of the transaction want America to remain complacent.
| Teleprinter | security | Latest | Change | % Chg |
|---|---|---|---|---|
| S | SPRINT CORP. | 5.53 | -0.01 | -0.27% |
| TMUS | T-MOBILE US INC | 73.45 | +0.54 | + 0.73% |
| T | AT & T INC. | 31.04 | 0.36 | + 1.16% |
| VZ | VERIZON COMMUNICATIONS INC. | 57.01 | 0.42 | + 0.75% |
In addition, by 2024, the new T-Mobile will have three times more capacity 5G than the two companies alone. Simple economic data tells us that wireless prices will go down and not increase because of the large number of new offers and capabilities created by 5G.
And after spending nearly $ 40 billion on a new network and 5G services, the new T-Mobile will have no choice but to aggressively compete on price and quality to attract enough customers to pay for their new facilities and fulfill their additional capacity. If the new T-Mobile increases prices, consumers would take refuge in other carriers, which would deter first to raise prices.
Finally, the merger will create jobs, not destroy them. In total, the combined firm's investment of nearly $ 40 billion in 5G infrastructure and services is expected to create and sustain new jobs for more than 33,000 people between 2019 and 2023.
Do not believe this prediction? Take a look at T-Mobile's history of job creation since acquiring MetroPCS six years ago. The same opponents predicted a loss of 10,000 jobs, but T-Mobile tripled the number of Metro employees, creating 12,000 new jobs.
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This merger will create a loaded sniper who will propel America faster towards our 5G future. If regulators allow these disrupters to unite, investments, innovation and jobs will leap, and America will win the global race at 5G.
Mr. McDowell, former Commissioner of the FCC (2006-2013), is a partner at Cooley, LLP and represents T-Mobile.
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