Pink and Yellow, is the merger real now
T-Mobile and Sprint have been announcing their potential merger for the past few years now. Every time a news publication put out news of the merger regulators step in to shut it down. So when I heard about the potential for a merger again I just rolled my eyes and ignored it. Of course the one time I ignored the news it turned out to be true.
Yesterday the “Big Pink” himself (John Legere) announced on his Twitter page the big news. John Legere and Marcelo Claure (Sprint CEO) announced the partnership that will bring “lower prices, better service, and first and best to 5G nationwide”. The question is will this merger actually make it completely through all the regulators and what would they have to give up to make it happen?
Though going from 4 main wireless carriers to 3 limits the competition, Sprint and T-Mobile was far behind Verizon and AT&T as far as infrastructure and reliable nationwide coverage. Combining Sprint and T-Mobile could actually bring more competition to lower the cost of wireless service.
Promises, promises, promises…….
Yesterday they said all the key words that will hopefully sway regulators and the public. The promise of jobs and stimulus during a time when Americans are getting back to work will hopefully get the public on their side. It is just when you step back and look at the big picture you have to ask if they are being legit. T-Mobile merged with (aka own) MetroPCS, Sprint owns Virgin Mobile and Boost. With all the lower cost carriers under one roof, now T-Mobile, the question is how will they actually be able to truly lower costs?
26 Billion dollars is a lot of money and that is what it will take to complete the merger. This merger (more like T-Mobile buyout) has so much potential and promises that I find will fall short. For one when a company merge they have to deal with all the regulators followed by all the labor groups. And if any unions are involved this process could take even longer. Add to that no company is going to want to pay two people to do the same job. So this means they are either going to create another job or get rid of some people (I see the latter happening).
I’m hopeful but am realistic
I will give T-Mobile credit. Ever since their “un-carrier” plans they have truly challenged the wireless industry. And of all the CEO’s, John Legere is one of the few who will answer a tweet and have someone get back with you asap. If it wasn’t for their sketchy coverage I would have switched a long time ago. So if any company can make it happen I believe a John Legere T-Mobile can. The problem is that anyone that has been through a merger knows the deal. There is this push to get down to a certain number whether it be head count or budget. Then they will cut all of the overlap starting with upper management. Areas where there is both a T-Mobile store next to a Sprint store will be reduced to just one store with only some of the workers being able to move over to the other store.
Mergers are messy and unfortunately the people caught in the crossfire are the lowly worker ants. Store managers are left in the dark and can only be optimistic for the employees. Workers are left to hope for the best and prepare for the worse relying on rumors. It is going to be a time of both excitement and fear, especially for the company being bought out. I just hope at the end they actually do take care of their current employees.
Closing of Corporate store and opening of more retail stores.
When I listen to the CEOs talk I think about the reality versus promises. They are correct that it will cost a lot to bring about 5G. And the build up will take awhile. If Verizon, the most successful of the carriers, is looking to raise rates to be able to pay for 5G, then how will T-Mobile/Sprint be able to do the same for less?
I think the reality is during the merger there will be a reduction of some of the Sprint and T-Mobile Corporate stores only keeping the spots that are in a prime location. All the jobs and stimulus created will come in the form of contracted work. Instead of taking on the payroll themselves I see T-mobile opening up more areas to your retail stores to handle some of the load. With many people going to places like Best Buy for their phones, the need for a bunch of brick and mortar stores are not necessary. The phone sells can take place through the retailers, issues handled over the phone (or at the retailer the person bought the phone), and a few corporate stores to calm the public.
It will be interesting to see how this merger (buyout) pans out. I suspect it will be 3-5 years before the process is actually complete. Hopefully the merger results in better coverage and more competitive prices and services. If that happens then it will be a win for all of us.