What to expect from the T-Mobile/Sprint Merger
The T-Mobile and Sprint merger announced in mid-May poses radical and widespread changes to infrastructure stakeholders. The deal is only in preliminary stages, but if it receives federal approval, umbrella company “T-Mobile” will emerge as the second largest wireless carrier in the U.S.
According to a recent article from industry experts with Steel in The Air, the probability that the Department of Justice and the FCC will approve the merger is less than fifty percent. However, should the companies implement spectrum and markets, the deal will stand a better chance.
The mergermay have implications on day to day business for a variety of industry stakeholders from tower owners to the landlords with cell tower leases.Here’s a summary of potential changes to anticipate in the upcoming months and years:
- With fewer competitors, consumer prices will likely rise.
- While T-Mobile and Sprint are making promises that the new expansion will create jobs, A large component of the merger’s synergy will be realized through the termination of employees with overlapping and conflicting roles. One of the biggest wins for the new Mega Carrier would be the large scale decommissioning of as many as 35,000 cell sites out the combined 110,000 currently in service. The general consensus among analysts is that Sprint CDMA sites will comprise the vast majority of terminations in favor of T-Mobile’s GSM network platform. There will be select cases where retaining Sprint sites will be more practical, but these instances will be rare.
- Landlords and Tower Owners that recently signed a lease with either Sprint or T-Mobile should be prepared for the deal to be stalled or cancelled altogether.
- Valuations are already experiencing fluctuations, but as the market adjusts, valuations should stabilize. All told, leasers don’t need to worry about lowering costs — the merger isn’t likely to decrease valuations.
Another thing to consider if the $26.5 billion merger is approved is the deployment of 5G, Enterprise Mobility reports. With combined resources, the newly merged company could expedite 5G deployment, presenting data transfer speeds that are ten percent faster than current standards.
The deployment of 5G alone will introduce a separate category of changes to the industry, but one thing leaseholders should remember is that they have time to reassess the industry and make accommodations — many of these changes will take up to five years to come to fruition.
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