Click to Skip Ad
Closing in...

Get ready for all the wireless carriers to get worse

Published Apr 28th, 2017 3:34PM EDT
T-Mobile Sprint merger

If you buy through a BGR link, we may earn an affiliate commission, helping support our expert product labs.

The last couple months have seen a welcome change in the wireless industry. Instead of massively confusing bills and data caps, we’ve had prices slashed across the board and unlimited data plans for all. But thanks to the unending drive for consolidation and profits, the good times aren’t going to last.

During the recent 600MHz spectrum auction, which ran from the end of 2016 all the way to last week, the government imposed a “quiet rule” on carriers. They couldn’t talk about the auction, their plans with any spectrum, and they couldn’t talk with anyone about merging. But now that quiet time is over, it’s just a matter of time until some blockbuster deals happen.

Rumors suggest that T-Mobile, Sprint, and Dish are all in talks for partnerships, acquisitions, or mergers. For Sprint, it’s a fight for survival: recent financial results have been dire, and since the company didn’t buy any new spectrum in the FCC’s auction, the network won’t see substantial improvements in the near future. SoftBank, the Japanese company that owns Sprint, has been looking for a chance to unload Sprint for years.

The most-talked-about target is Deutsche Telekom, the majority owner of T-Mobile. The idea would be to merge T-Mobile and Sprint, the third-largest and fourth-largest networks in America, to form one super-network.

Although that might lead to slightly improved coverage, it would be terrible for consumers in general. The fight between T-Mobile and Sprint for customers has led to lower prices, the ending of multi-year-contracts, and a host of other consumer-friendly moves in recent years. Losing Sprint, which offers the cheapest contracts of any of the big networks, would mean losing the one company that applies downwards pressure to prices.

The alternatives aren’t much better. One of the few other companies with the money and desire to build out a US-wide cell network could be Amazon. Owning a wireless network would give Amazon direct control over delivering some of its services, like Prime Video, straight to consumers without having to go through an existing internet service provider. A wireless network could also be invaluable in the future for Amazon’s drone delivery service, which would need some kind of national command-and-control network.

It’s not just T-Mobile and Sprint that are rumored in merger deals, either. Dish Network, the satellite TV provider that also owns Sling TV, bought up $6 billion of spectrum at the FCC’s recent auction, and now sits on one of the largest spectrum holdings in the US. It’s possible that it could be bought out by a company like Comcast to build out a brand-new wireless network, or merge with an existing wireless network for further expansion. Any of those options would involve losing the country’s biggest independent TV provider to a major cable company, which would be more bad news for consumers.

Analyst Tim Farrar sees a combination of all these scenarios being the logical option: a three-way deal between T-Mobile, Amazon and Dish to build out a new network, using T-Mobile’s new spectrum and Dish’s spectrum holdings. Using Amazon’s capital, they could quickly build out a fast and wide-reaching network with brand-new technology, which could be used by T-Mobile for cell service, by Dish for internet TV, and by Amazon for world domination/any of Jeff Bezos’s pet projects.

The bottom line is that the status quo isn’t here to stay. Between Sprint’s financial woes, T-Mobile’s desire to build a giant new network at speed, and Dish’s unused spectrum, it seems that a deal is likely. The only questions are when, and how badly it will affect wireless customers.

Chris Mills
Chris Mills News Editor

Chris Mills has been a news editor and writer for over 15 years, starting at Future Publishing, Gawker Media, and then BGR. He studied at McGill University in Quebec, Canada.