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It’s been talked about for a long time, and they even tried it once before but were slapped down by regulators and the Obama White House, but now it might actually be happening. T-Mobile and Sprint, the third and fourth largest wireless service providers in the US, are merging in a $26 billion deal. They’ll keep the T-Mobile name, and T-Mobile CEO John Legere will continue to run day-to-day operations with his team. That is, if regulatory agencies approve of it. They’ve been a lot more flexible under President Trump.

The reasoning for the merger is simple: the wireless market is competitive, and two combined companies is better than one. T-Mobile and Sprint are claiming that the merger will create jobs, as the newly-formed company would pursue 5G in a big way. However, analysts are saying just the opposite, that as with any merger, redundant positions will be cut.

If the deal goes through, its expected to close in the first half of 2019. The two companies promise that, once combined, they’ll be able to offer better service at lower prices. The former is practically a given, but the latter remains to be seen. Historically, less competition means higher prices, not lower, and this would shrink the wireless market from four competitors to just three. And here’s the kicker: back in March, at Mobile World Congress, Sprint CEO Marcelo Claure said that 5G could be considered a premium service, giving companies an opportunity to raise prices.


Ultimately it would take a few years to migrate everyone over to T-Mobile’s network, which is what the plan is. Nothing is set in stone yet, but the odds look good that this is happening.

 

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