Technology Stocks

T-Mobile Us Inc. (NASDAQ:TMUS) and Sprint Corp (NYSE:S) to Merge But a Concern for Regulators

T-Mobile Us Inc. (NASDAQ:TMUS) closed the day at $72.05 on a volume of 5.7million shares, while Sprint Corp (NYSE:S) closed at $6.3 up 1.94%.

T-Mobile Us Inc. (NASDAQ:TMUS) and Sprint Corp (NYSE:S) have a proposal to merge, but executives from both companies have a task of convincing regulators, consumers as well as analysts that the merge would be a positive one for the telecom industry, the economy as well as the rural communities. As much the two companies believe that the merge that is worth $26.5 billion is an improvement, the lawmakers, on the contrary, believe the merge is just but a dizzying deal.

Is the Telecom Merge in Trouble?

Sprint and T-Mobile have been working on a deal of merging which would bring a seismic shift in the mobile world. However, as things stand, the deal is sailing through some significant resistance. The executives from both parties have to convince the House of Representatives panel about how good the merge would be.

For instance, T-Mobile CEO, John Legere, says that several promises will come with the merge as it would help enable the US leadership in 5G, drop wireless prices, increase competition in the wireless as well as the in-home broadband and also it will act as a catalyst for job creation.

Sprint Corp.’s executive chairman Marcelo Claure also had positive vibes about the merge saying that the consumers will get more but be paying less. Besides, T-Mobile hired a former commissioner with the Federal Communications Commission whereby they vowed not to raise the prices. The companies promise a combined network after the merge that’ll deliver best services at lower prices. The argument is that the combined scale will suddenly help in building a faster and more efficient network.

Consumers and Regulators are Skeptical

T-Mobile and Sprint companies have promised lower prices, but most consumers, as well as regulators, have doubts. Perhaps most think that shrinking the national market to three from essentially four will suggest a negative impact on the competition which would only mean higher prices for several people.

Potentially prices may rise and with the industry being competitive, removing a player could only ease the pressure. However, given the positions of AT&T and Verizon, the “New T-Mobile” might require to pull everything to stay competitive which suggests that always there will be blood on the floor.

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