As they try to curry favor for their proposed merger, T-Mobile and Sprint are doubling down on the message that any concerns about their pairing is outweighed by the combined company's ability to deploy a high-capacity, nationwide 5G network.
That was the general theme that T-Mobile US Inc. and Sprint Corp. (NYSE: S) put forth in a 120-plus-page FCC filing (PDF) that served as a response to those who oppose the deal or are calling for conditions to be placed upon it. (See FCC Halts Sprint/T-Mobile M&A Review.)
They continue to insist that, when it comes to the 5G network that will result from the merger, one-plus-one will add up to much greater than two.
Their standalone 5G plans "are not even close to comparable to what New T-Mobile will deliver," they argued. "The alternatives suggested by petitioners are unworkable, unavailable, or impossible."
More specifically, they claim that the combined network will more than double 5G monthly capacity by 2021 and nearly triple it by 2024, when compared to the combined 5G capacities of the standalone networks.
They likewise believe that T-Mobile and Sprint alone do not have enough spectrum to refarm to 5G as rapidly as the combined company will, without sacrificing LTE performance.
They also dumped cold water on suggestions that the use of alternative mid-band spectrum, such as the 3.5GHz CBRS band, would move the needle in the area of spectrum, believing that there could be an auction of the licensed portion of that band in late 2019 "at the earliest." The CBRS band "is not a near-term viable spectrum alternative option," they claimed. (See Who's Doing What in the CBRS Band? and Federated Wireless Sets Plan for Massive CBRS Band Deployment .)
Sprint needs a big lift
The filing also paints Sprint as a troubled, beleaguered mobile carrier that is not in a position to overcome hurdles on its own. Sprint, they say, faces "network performance deficiencies" with a lack of coverage and deployed capacity. And they hold that Sprint has been unable to overcome negative consumer perceptions with unsustainable promotional discounts and rates.
To top it off, Sprint's proposed standalone service "will be geographically limited," with much of its planned investment actually targeted to improving its LTE network.
And while a merger would reduce the number of competitive mobile carriers, a point made by many who are against the deal, T-Mobile and Sprint claim that their combination would put "significant competitive pressure" on Verizon and AT&T to boost investments in their network, expand network capability and provide even better terms to MVNOs.
They also shoot down the suggestion by Dish Network LLC (Nasdaq: DISH) and others that the deal should not go through, given that the attempted merger of AT&T Inc. (NYSE: T) and T-Mobile failed. Instead, they say that is not an apples-to-apples comparison, as the fusion of nation's number three and four mobile carriers would instead create "a stronger maverick" to take on two larger incumbents (Verizon and AT&T).
They also point to Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s and Charter Communications Inc. 's entry into mobile (via MVNO deals with Verizon Wireless ) and Dish's plan to launch a narrowband IoT network followed by a grander 5G network as further points of competition. Understandably, the filing failed to mention that T-Mobile CEO John Legere in February labeled Comcast's move into mobile as "very irrelevant" and Charter's move as "irrelevant squared." (See Dish: We Can Meet Wireless Buildout Schedule.)
Fast-forward to today, T-Mobile and Sprint have changed their tune: "These companies are well-established, well-capitalized and have widely recognized brands," they say in the filing.
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They also reiterated that the combined network will establish a wireless in-home broadband service alternative that is poised to acquire 1.9 million customers by 2021 and 9.5 million by 2024. (See Charter Chief Shrugs Off 5G Threat and 5G Fixin' to Become 'Largest Existential Threat' to Broadband Providers – Analysts.)
They also took aim at claims that the proposed deal would be bad for MVNOs, arguing that the merger would create more capacity, reduce wholesale prices and put pressure on Verizon and AT&T to provide more favorable terms to their MVNO partners. TracFone, meanwhile, filed comments of support that echoed the benefits that Sprint and T-Mobile spelled out. (See Altice USA Urges FCC to Deny, Alter T-Mobile/Sprint Deal .)
T-Mobile and Sprint, which say they have identified $43.6 billion in synergies generated by the merger, also took aim at an analysis from the Communications Workers of America that the merger would cost 28,000 jobs.
The carriers said CWS cherry-picked categories showing job losses (like retail and headquarter employees) and avoided others such as call center people and employees needed for new lines of business (broadband, IoT) and network buildout and integration, and the acceleration of 5G deployment.
Instead, the two merger partners claim the new company will create more than 12,000 new jobs alone just to serve small towns and rural communities from the deal, and that T-Mobile will open 600 new stores to serve those smaller areas.
— Jeff Baumgartner, Senior Editor, Light Reading