T-Mobile and Sprint Merger Impact

Goals

Determine the impact of the T-Mobile and Sprint merger, particularly on Cricket and the Prepaid category as a whole.

Early Findings

Details about the Merger

Consumer Impact

  • John Bergmayer, legal director for Public Knowledge, says that the merger will put consumers at risk and consumer advocacy groups have said that the merger will inflate prices.
  • Coverage may increase for Sprint customers, but Sprint customers with older phones may need to buy new ones.
  • The companies have also agreed to increase high-speed internet coverage to rural America.

Prepaid Business Impact

  • As part of the deal, Dish network has agreed to buy Sprint's prepaid business, which includes Boost, Virgin Mobile, and Sprint prepaid, for $1.4 billion. T-Mobile will keep its prepaid brand, Metro.
  • Boost founder Peter Adderton was a critic of the merger from the beginning because of the impact it may have on budget customers that gravitate towards prepaid providers.
  • The National Wireless Independent Dealer Association, a trade association for independent wireless dealers, said that the consolidation and reduced competition that will result from the merger will result in excessive control of the prepaid wireless market and negatively impact the industry.
  • The state attorneys general that argued against the deal say that the merger will be particularly harmful to prepaid subscribers, as many cannot pass the credit check that is necessary to purchase other kinds of mobile wireless telecommunications services.
  • Mobile virtual network operators, which operate by accessing networks controlled by other wireless companies, could see coverage and data speeds improve as a result of the merger but also higher prices and the need to replace phones.

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