The study highlighted the new entity’s stronger national position and spectrum advantage
The adoption of 5G technology in the United States will experience an acceleration if the merger of mobile carriers T-Mobile US and Sprint is approved, according to a recent study by research firm Strategy Analytics.
The new report projected that the T-Mobile US-Sprint merger will result in a 17% surge in the uptake of 5G services by 2023. The study also said that the merged company will outperform individual operations of the two carriers by nearly 1% in market share of gross additions, 0.5% in subscription market share, and 0.4% in revenue market share.
The study also concluded that while the combination of T-Mobile US and Sprint would have a stronger national position and spectrum advantage, both Verizon and AT&T are capable of responding and managing market share losses.
The upside of merger-driven 5G acceleration could be offset to some extent by a less competitive pricing landscape and potential for operators taking more profit out of market, according to the study.
“The new T-Mobile even as a strong number two player more on par with Verizon and AT&T will remain disruptive and go after growth with its market-leading 5G smartphone positioning using low and mid-band spectrum,” said Susan Welsh de Grimaldo, director at Strategy Analytics. “With the merger, the new company would be better positioned for a convergence play, growth in automotive and other high mobility 5G use cases, with new strength in wholesale and enterprise and positioning for Network-as-a-Service (NaaS) with 5G network slicing.”
“The faster 5G deployment and adoption will be the main merger benefit for US consumers, though everything comes at a cost. Operators in three-player markets enjoy EBITDA margins 3-4 percentage points higher than those in four-player markets so a merger on this scale may weaken price competition and increase operator profits,” said Phil Kendall, executive director at Strategy Analytics.
On April 29, Sprint and T-Mobile announced that they were merging into one $146 billion company. The combined company will have more than 127 million customers, with a vast swath of spectrum holdings including Sprint’s 2.5 GHz spectrum and T-Mobile’s nationwide 600 MHz spectrum.
In related news, T-Mobile US confirmed it has carried out a 5G trial with Nokia, claiming it was the first 3GPP standards-based trial to achieve a bi-directional data transmission over millimeter wave.
In February, the carrier had unveiled plans to start building out 5G and “5G-ready” capabilities in 30 markets this year. T-Mobile US said that users in New York, Los Angeles, Dallas and Las Vegas will be first to experience 5G services when the first 5G smartphones launch early next year.
Image copyright: lightwise / 123RF Stock Photo