It's been 15 months of lobbying... since T-Mobile and Sprint announced plans to merge. Last week the wireless companies got what they wanted: the Justice Dep't blessed the merger. The final hurdle is 13 states + DC that are suing, but magenta-loving CEO John Legere is moving forward like it's a done deal — he says rural America will get more bars and it's a win for American 5G. Here's the new "Big 3+1" in wireless:
- AT&T = 100M customers
- Verizon = 100M customers
- T-Mobile = 90M customers (the "Sprint" name will be retired)
- Dish Network (including BOOST) — If the wireless industry is The Beatles, then Dish is its Ringo Starr.
This marriage comes with 1 big condition... There must be a 4th wireless company. T-Mobile was forced to sell Boost Mobile to Dish Networks because regulators worried it would be too big after acquiring Sprint. So the new #4 is mostly low-cost prepaid plans. Here are some other mega-mergers that featured competition-salvaging conditions:
- Big Beer: When AB InBev merged with SAB Miller for $104B, they had to sell Miller and Coors beer brands.
- Big Entertainment: When Disney acquired Fox, Fox Sports and YES Network had to go.
3 companies will now handle 95% of American phone plans... T-Mobile used to be that pesky 4th that undercut Verizon and AT&T prices (it was great for consumers). Now with just 3 players, it's much easier for each to focus on profits by raising prices, and not worry as much about competition. The new reality: 3 is a big difference from 4.