Last week, Marcelo Claure of Sprint discussed the merger with T-Mobile US and the industry transformation to 5G and AI at the Mobile World Congress Americas 2018 conference. I thought many of his comments on the changing industry were right on target but others missed the mark. Let’s take a closer look and boil this down to two simple parts.
One is the transformation of the wireless industry with new technology like 5G, AI, the cloud and new competition that will both impact and, in fact, change the wireless industry going forward.
Two is the merger between Sprint and T-Mobile US—what it means to both companies and to the wireless industry.
Regarding the transformation of wireless, that is happening. In fact, if we pull the camera back we will realize that has been happening over the last several decades as we’ve moved from analog to digital, from 2G to 3G to 4G and now to 5G.
So, we are fully aware of this kind of transformation and how it will impact the wireless industry. However, this time there will be differences as well. The effect will not only impact traditional wireless, but other companies in other industries as well. It will include many new technologies like AI, which is changing everything.
Example: The cable television industry and, in fact, the entire pay TV industry is also changing with 5G. When these speeds arrive on our wireless networks, we will see new, wireless pay TV services from existing players and newcomers as well.
Mobile TV, wireless TV will enter pay TV space
That means leading competitors like AT&T DirecTV NOW, Comcast Xfinity, Charter Spectrum and Altice. Expect new competitors to join the crowd like AT&T Mobility, Verizon Wireless, T-Mobile, Sprint, C-Spire Wireless, US Cellular and others. Also, Amazon.com, Facebook, Google, Microsoft, Hulu and so many others will enter the mobile TV space.
Also expect many other new competitors to enter the marketplace. Wireless TV or mobile TV will see a massive growth wave transform everything in the industry.
That kind of transformation will also transform other industries as well. All that is absolutely true.
What about Sprint and T-Mobile in coming 5G world?
What about Sprint and T-Mobile US? If they do complete their merger, it will enhance their chances of their continued success in a new 5G world. If they don’t merge, the chances of them continuing to show rapid and strong growth diminish.
This is where I disagree with Marcelo Claure. The new world of 5G is coming on strong with or without a Sprint, T-Mobile US merger. The only difference the merger makes is whether these two companies will fully participate.
I see the future of the wireless industry having two distinct options. If the merger is approved, the wireless industry will have three major competitors. All of them will be strong and growth will continue for all.
However, if the merger is not approved, the industry will have four major competitors as it does today. In that world, the first two, AT&T and Verizon will continue rapid growth in a 5G world. The other two, Sprint and T-Mobile US will struggle for growth.
T-Mobile US is a marketing genius and Sprint has loads of spectrum. Together, they will pose a competitive threat. Separate, they will not. That’s the difference as I see it.
So, it depends what direction regulators are looking when they consider this merger. Are they looking forward to the coming 5G world, or are they looking backwards to yesterday? That’s the only question they need to consider. That’s the real question they need to answer because merger or no merger, the new world of 5G is coming.
