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Verizon ‘doesn’t care’ about the Sprint T-Mobile merger

Sprint T-Mobile merger, price, comments

If you listen to what T-Mobile CEO John Legere has been saying about the T-Mobile Sprint merger, Verizon and AT&T should be running scared. “Even with their vast resources, AT&T and Verizon cannot rapidly build nationwide 5G and their planned 5G networks will only be available sporadically in just a handful of very limited areas,” T-Mobile’s press release says. “To build nationwide 5G, they either have to kick
current customers off LTE, which would take years, or use a type of spectrum (millimeter wave) that can only carry a signal 2,000 feet from a cell site – versus multiple miles for other spectrum – making it nearly impossible for either of them to create a truly nationwide 5G network quickly.”

That’s not a small threat. If Legere is right (a big if!), T-Mobile will rocket ahead of its competitors in rolling out 5G, knocking Verizon and AT&T off the top spots in wireless for the first time in decades. If that’s all true, why is Verizon’s CEO so blase about the whole thing?

“We don’t care, is the answer to that,” Verizon CEO Lowell McAdam told GeekWire in an interview. “Maybe the fourth time is the charm here, I don’t know,” he said, throwing shade on T-Mobile’s previous efforts to merge. He told the same thing to the Seattle Times, saying “We don’t have a point of view on whether it goes through or it doesn’t…we frankly don’t care.”

He fleshed out his answer a little to GeekWire, saying “I think the U.S. has always been a competitive market. Competition will probably be different if they’re together, but it’s still going to be a very competitive market. So we don’t care. It’ll take them two years — a year of approval and a year of integration — before they’re pointed into the wind, if you will. And we’re going to make the most out of those two years.”

Cynically speaking, competition could be the real reason McAdam isn’t too worried about the merger succeeding or not. Critics have suggested that the merger would likely raise prices, as T-Mobile and Sprint are almost entirely responsible for the downwards pressure on pricing we’ve seen over the last few years, as well as the introduction of new features like unlimited data.

While a successful merger would mean that the combined network would have more capital resources to compete with Verizon, the removal of that low-price option could be fantastic for Verizon’s bottom line. T-Mobile has been a constant thorn in the side of Verizon for years; the fact that Verizon’s CEO doesn’t care about such a blockbuster merger suggests that it might not be as good for competition as Legere is making it out to be.