Speaking at the MoffettNathanson Media & Communications Summit, T-Mobile Chief Technology Officer Neville Ray has provided a few key details for how a merger with Sprint might work. Comparing the network integration to the company’s previous merger with MetroPCS, Ray explained that the bulk of the process would center around migrating customers and would be relatively simple. To begin with, the primary asset of concern in the merger would be Sprint’s spectrum holdings. That would be used to build out T-Mobile’s network further, adding both scale and density. The new carrier would also avoid building out new infrastructure as much as possible over the short term. Although the merger is, according to Ray, still at least a year from gaining approval, the next step would be to begin switching Sprint customers over to the new T-Mobile network. That shouldn’t be too difficult either; Ray says that a substantial portion of those customers – around 20 million – already use handsets that are compatible with both Sprint’s CDMA network and T-Mobile’s, which is GSM-based.
That entire process, Ray continues, would be predicted to take between two and three years. The cost of any new buildouts or adjustments to current Sprint infrastructure would be spread across that. However, the companies are still waiting for approval from the appropriate agencies and are currently in talks with the FCC, the DOJ, and the Committee on Foreign Investment in U.S. Companies. For the time being, everything seems to be going relatively well. One commissioner at the FCC reportedly compared the possibility of the merger in terms of moving from annoyingly kicking competitors in the shins to “punching them in the face,” according to Ray. Bearing that in mind, and despite the fact that AT&T appears willing to accept the merger, there still aren’t any guarantees the deal will move forward.
Sprint recently posted its best-ever financial quarter, which may give regulators some pause when considering whether or not the companies can compete on their own. Similar mergers have been pressed in the past and have generally failed over concerns about negative impacts on the competitiveness of the market. Moreover, plans revealed at the summit for a new competitive media service based on the pair’s combined company’s fixed wireless offerings could compound the issue. So it remains to be seen whether Sprint and T-Mobile can gain approval for a merger and, for the time being, there’s no way to gauge the accuracy of guesses, regarding which way things might go.