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Effects of the merger between T-Mobile and Sprint

On Behalf of | Jul 20, 2020 | Mergers & Acquisitions |

The merger between the third- and fourth-largest wireless communication companies in the United States, T-Mobile and Sprint, became official as of April 1st of this year. According to Forbes, closing the deal took approximately two years following the initial 2018 announcement.

A few months have elapsed since the completion of the merger. It may be too early to project long-term effects, but the deal has implications for the company and its customers.

Effects on the company

The merger has not been without its setbacks. T-Mobile’s debt burden is now $64.3 billion as a result of it. The newly merged company was subject to an investigation by the Federal Communications Commission due to a network failure of nationwide scope resulting from nonfunctioning redundancies. Nevertheless, T-Mobile shares hit an all-time high in June, and it anticipates that emerging 5G communications will generate major new marketing streams.

Effects on customers

Comparing American networks to Canadian ones, PC Magazine anticipates that once T-Mobile’s price promise expires in three years, customers will pay more for use of the networks. However, there is also the expectation that the networks themselves will improve, providing a good experience similar to that enjoyed by wireless customers in Canada.

Some customers expressed concern or skepticism over the announcement of the merger, fearing a repeat of the disastrous merger of Sprint and Nextel in 2004. However, that merger involved aspects of duplicative systems, nonstandard network equipment and incompatible parallel networks that are absent from the current merger. Though Sprint and T-Mobile did not run on the same networks when they were separate, many phones are compatible with each.


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