Cell Phone Company Mergers: Good or Bad?

When thinking about cell phone companies, a few big names come to mind right away: AT&T, Verizon, T-Mobile, and Sprint. However, what would happen if two of the biggest mobile carriers joined forces to create an even more dynamic, successful carrier that could cater to an even wider customer base? There are a few outcomes to be explored, based on recent events.

There have been rumors of two cable giants, Sprint and T-Mobile, combining their efforts and merging to form a deal for further development. The drawbacks are that Sprint has a low customer retention rate, and that the entanglement of their parent companies comes at a premature time. T-Mobile would need to get shareholders involved in the deal, and Deutsche Telekom would need to sign off on the merge, being T-Mobile’s superior. SoftBank will also be involved, seeing as Sprint is one of their many subsidiaries.

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Another Merger Attempt

This merger was also attempted in 2014, which would have combined the two carriers into one and eliminated competition. However, due to T-Mobile’s success and the turbulence of other top carriers, Sprint’s potential to regain their traction is hanging in the balance. Their customer engagement does not match their numbers, which makes the merge a gamble in some respects.

Changes in Service?

As it stands, T-Mobile and Sprint are the third and fourth largest carriers in the United States, behind AT&T and Verizon. For phone services, this means fewer decisions in choosing a carrier, or a potential change in an existing provider. For anyone already with one of the two, the policies and plans would not see too much change, with T-Mobile leading much of the charge.

This is not the only merger rumor that has sprung up in the past couple of weeks. AT&T and Time Warner Cable, two pioneers in their fields, are also discussing joining forces to change the definition of Internet use as the world knows it. It would go down as one of the biggest mergers in history. Right now, everything is under speculation among various news sources, but there are many potential issues that could arise from this merger.

The Problem with Massive Mergers

The main issue with a massive cell phone merger is that it further gets rid of competition. AT&T, Verizon, T-Mobile, and Sprint already control the mobile carrier market — they even control the cell service of alternative mobile carriers. Less competition typically means higher prices for plans because these companies are in control of the market.