Report: Sprint, T-Mobile Merger Immediately Killed Wireless Price Competition In U.S.

Before T-Mobile acquired Sprint, activists, consumer groups, and deal critics (including me) warned repeatedly that the telecom sector megadeal would result in layoffs, less competition, higher prices, and a lower quality product overall. The Trump FCC and DOJ very clearly didn’t care; they rubber stamped the deal without even reading deal impact reports.

T-Mobile CEO John Legere, famous for wearing magenta high tops and occasionally saying “fuck,” called deal critics liars, insisting that the combination of the fourth and third biggest carrier would result in lower prices, bold new innovations, untold new synergies, and would be “jobs positive from day one.”

It didn’t take long before Legere and T-Mobile executives were proven to be liars. T-Mobile quickly moved to lay off 9,000 employees, and the company’s competitive edge completely evaporated. And a new report by Finland based research firm Rewheel found that the merger immediately effectively stopped nearly all meaningful price competition in the U.S. wireless market:

“Five years on, the Sprint / T-Mobile 4-to-3 mobile merger made the US one of the most expensive mobile markets in the world.”

Before the merger, deal critics repeatedly pointed out that in every single country where regulators allowed a consolidation from four to three wireless carriers, it effectively stopped price competition dead in its tracks. With less incentive to compete on price, U.S. wireless providers simply stopped trying. Now, U.S. consumers once again pay some of the highest prices for mobile data in the world:

Keep in mind: these studies often can’t or won’t include all of the various ways telecoms nickel-and-dime you with hidden fees and surcharges post sale (activation fees, etc.), so the real world impact on consumers financially is actually likely worse. Gone also are all the little “uncarrier” pro-consumer efforts T-Mobile attempted to use to differentiate themselves from AT&T and Verizon.

Employees, of which there are 9,000 less of now, will also tell you T-Mobile is a shadow of its former self.

Of course T-Mobile knew this would happen. It was the entire point. Less competition allows for greater nickel-and-diming of consumers, higher prices, and fatter profits for investors (at first). Trump regulators obviously knew it would happen as well; to justify approval they proposed the half-assed, doomed effort to pretend Dish would become a viable fourth replacement option (as predicted, it isn’t).

Trump regulators not only didn’t even read the deal impact reports, the Trump DOJ’s top “antitrust enforcer,” Makan Delrahim, actively worked with the companies using his personal devices in his free time to ensure the deal saw government approval. You might recall T-Mobile hired Corey Lewandowski and ramped up the time they spent at Trump hotel properties to help seal the clearly-corrupt deal.

That is all, if you’re unfamiliar, not how “antitrust enforcement” is supposed to work, no matter what “free market” and “Libertarian” telecom sector funded think tanks like to claim.

It’s important to remember that the previously competitive T-Mobile was a direct byproduct of the Obama DOJ’s decision in 2011 to block AT&T’s attempted acquisition of T-Mobile. That decision, actually based on evidence, protected competition and consumer welfare. That history is usually memory holed by “free market,” telecom-funded think tank apologists for mindless consolidation.

Somewhere former T-Mobile CEO John Legere is sitting on a giant pile of money. Maybe he sometimes experiences a slight twinge of conscience watching the pro-consumer company he helped build steadily turn into AT&T. But so unconcerned are T-Mobile executives with accountability for lying to regulators, they still haven’t bothered to delete Legere’s 2019 pre-merger lies from the T-Mobile website.