T-Mobile CEO John Legere believes the future of the American innovation economy comes down to his company’s intended merger with Sprint. At least, that’s the case T-Mobile is making as it seeks regulatory approval from the Federal Communications Commission.
On Tuesday, Sprint and T-Mobile submitted a Public Interest Statement to the FCC arguing that the future of wireless competitiveness depends on the merger going through. The argument centers on 5G, the super fast next-generation wireless technology.
In a blog post tied to the filing, Legere attributed the success of American app-based technology companies to the nation’s competitiveness in 4G wireless technology.
“Uber, Snap, Venmo, Instagram – are all products and businesses built in part on the 4G mobile web,” Legere said in the post. “Analysts estimate this early leadership generated billions in economic value and millions of new jobs here in America. All because the U.S. led with broad 4G LTE. With 5G, the stakes are much higher.”
In addition to 5G, the submission says the merger will allow more Americans to “cut the cord” with traditional broadband providers and will improve connectivity to underserved rural areas. The two wireless carriers also claim that their merger will increase competitiveness in the wireless landscape, allowing the combined company to take on incumbents Verizon and ATT.
ATT may have blazed a trail for T-Mobile and Sprint with its recent victory in court. On June 12, a district judge approved ATT’s $85 billion merger with Time Warner, striking a blow to the Justice Department. The DOJ tried to block the deal, raising anti-competitive issues.
But ATT’s successful merger doesn’t necessarily mean Sprint and T-Mobile’s efforts to combine will be a slam dunk. The DOJ is reportedly investigating how the deal would affect consumer prices for smaller wireless providers, which sometimes rent wireless access from both companies. A combined company could charge those smaller providers more to use its service, which might eventually impact consumer prices.
In April, T-Mobile and Sprint announced their intention to merge into a $146 billion combined company. If the deal goes through, the combined company will be called T-Mobile with Legere at the helm as CEO. If the companies receive regulatory approval, they expect the merger to close by the first half of 2019.