Nov 8, 2019

T-Mobile's quid pro quos for the Sprint deal

Illustration: Rebecca Zisser/Axios

T-Mobile dangled carrots before consumers and legislators on Thursday, promising cut-rate plans along with free 5G service to first responders as well as home broadband for 10 million U.S. families.

The catch: The promises all depend upon a successful close of the company's pending deal to buy Sprint.

The big picture: The Department of Justice approved the deal in July after T-Mobile and Sprint agreed to sell certain assets to Dish Network and help that company create a new fourth national carrier.

  • Just this week, the FCC gave its formal approval for the transaction.
  • However, a number of states have sued to block the deal, and a federal judge has to approve the DOJ decision as well.

Details: Here's what T-Mobile is offering:

  • A 10-year commitment to provide free unlimited 5G access to every state and local police, fire and EMS agency in the U.S.
  • A program to offer free service, free hotspots and discounted WiFi devices to 10 million households over 5 years, an effort to close the so-called "homework gap" among homes that don't have internet access.
  • A $15-per-month prepaid plan, which T-Mobile says is half the price of its lowest current option.

Between the lines: T-Mobile has held a number of similar "Uncarrier" events (named for the company's branding) in the past, where it has offered customers additional perks.

  • While the past "Uncarrier" moves were aimed at luring customers from AT&T and Verizon, this one appeared aimed at the regulators and legislators who are weighing the merger.
  • Consumers have no say in the merger's approval, although T-Mobile would certainly like to see them weigh in with regulators and legislators.
  • It's almost as if the company were proposing a quid pro quo: Give us the deal, and we'll give everyone these goodies!

What they're saying:

  • T-Mobile CEO John Legere: "We have definitively put a stake in the ground around the kind of company the supercharged Un-carrier will be and the ways we can put this radically better 5G network to work doing GOOD for this country."
  • Rich Brome, editor-in-chief of mobile news site PhoneScoop: "I give T-Mobile credit for aggressively going after specific concerns of the state AGs. But the one complaint they didn't address: There is no way Dish will be a 'serious' 4th competitor."
  • Freelance journalist Karl Bode: "T-Mobile is out here desperately making promises in the hopes of getting state AGs to back off their merger lawsuits. ... [T]hese telecom mergers than I can count, these promises will evaporate in about two years, just as pink slips arrive."

Separately: T-Mobile said it would turn on its nationwide 5G network on Dec. 6, covering 200 million Americans in more than 5,000 cities and towns.

  • (Caveat: T-Mobile is doing most of that through low-band spectrum that offers strong coverage, but not the ultra-fast speeds possible delivering 5G using high-frequency spectrum.)

Go deeper: T-Mobile-Sprint merger deal approaches next hurdles

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