The recent announcement of a merger between T-Mobile and Sprint has been tried before. In 2014 the companies tried to make a deal, but decided against it after antitrust and FCC concerns with such a large merger in the industry with only a few other companies.In 2014 the FCC chairman under the Obama administration was Tom Wheeler. Wheeler is no longer the chairman, but it did not stop him from making statements regarding the current deal. Wheeler stated on CNBC, "I'll stipulate that John Legere is the world's greatest salesman. But what he's selling right now, it's old stuff." Wheeler believes that US consumers benefit more from having four national wireless providers.
The timing may be better suited for the deal now however with a new administration in the white house. It is clear that the two companies now believe that there is a good chance the FCC and Justice Department will approve the deal.
Sprint and T-Mobile will argue that they need to merge in order to compete with Verizon and AT&T. The $26 billion dollar deal would combine the customer base to around around 100 million.
In a recent interview regarding T-Mobiles buyout of Sprint, T-Mobile's CEO, John Legere stated, "Services are going to be broadened, prices are going to go down, speeds are going to go up. If you liked the competition before, you're going to love what's coming with this one."
Legere claims that they need to get the deal done in order for the US to compete with China in the 5G wireless race. In recent reports he stated, "All roads lead to Washington. China is beating the United States on 5G next-generation wireless but the new company can change that. We are behind. It's the early innovation cycle of 5G. We are behind China. This is not something we can allow."
Sprint CEO, Marcelo Claire has also pointed to competition with China as a reason for this deal in his statements. Claure reportedly stated on Monday, "the time is right for Sprint and T-Mobile to combine as they tout a mission to create a large-scale 5G network and thousands of U.S. jobs.
"The U.S. needs to lead in 5G," Claure said. "The only way to lead 5G is by combining Sprint and T-Mobile. AT&T cannot do it. Verizon cannot do ... the way were are going to build this 5G network."
"We think the deal is good for America, we think it's good for consumers," he added. "We've made it very clear that we're going to lower prices."
Consumer watchdog group, Common Cause has warned against the merger in a statement, "A proposed merger between Sprint and T-Mobile would pose significant public interest harms for consumers. The merger would cut the number of national wireless carriers from four to three, which would reduce competition in the wireless marketplace. Consumers would see no benefit to a marketplace where Verizon, AT&T, and T-Mobile call all of the shots. Instead, consumers can expect to pay higher prices and see fewer competitive options in the marketplace. Low-income consumers and other vulnerable communities seeking more affordable mobile communications services would be particularly hurt from the merger."
Earlier in the year the Trump administration intervened in a similar telecom deal between AT&T and Time Warner. That deal is currently undergoing a legal challenge in court.