The news has spread about the latest effort from T-Mobile and Sprint to bring together the two companies in a deal they say continues to drive competition and innovation in one of the biggest wireless markets in the world. The merger, which has some hoops and hurdles yet to clear, would position the new T-Mobile as the second-largest carrier in the U.S. market, with roughly 105 million subscribers and more than $126 billion in revenue. John Legere and Marcelo Claure have positioned the merger as an opportunity to consolidate resources and push competition further than the rival carriers so far have done. But what does this mean for the enterprise marketplace, and for the customers who have been considering or are using either of these carriers?
Effective immediately Sprint users will have the ability to leverage T-Mobile’s LTE network, ALTHOUGH WITH SOME POTENTIAL RESTRICTIONS.
First, it will mean a more expansive network for Sprint and T-Mobile users. Effective immediately Sprint users will have the ability to leverage T-Mobile’s LTE network. There are restrictions based on the technology you have deployed and whether you have the appropriate bands enabled within your device, but this is a great free, non-technician-required impact that can be enjoyed before a deal is finalized – if it gets finalized.
Initial plans released by T-Mobile and Sprint indicate that Sprint users will be migrated to the T-Mobile network after the completion of the deal. Roughly 20 million users, or roughly half of Sprint’s subscribers already have hardware that works on each network. This may be a challenge for enterprises, as hardware replacements will be required for all the remaining Sprint users whose hardware is not capable of connecting to the T-Mobile network. Will the carriers credit the cost of the required hardware? Will companies need to pay for the hardware at standard upgrade times? We’re watching this closely as the details of the merger develop.
Second, this merger creates greater competition within the enterprise marketplace where Sprint was losing ground and T-Mobile has spent substantial resources to grow its enterprise business presence. T-Mobile has seen significant success within government and with its recent deployment of a narrowband network for IoT devices. This merger will increase the capabilities of T-Mobile’s enterprise offering as the carrier integrates Sprint Enterprise services. Overall, Sprint’s Enterprise offering is more mature and robust than what is currently provided by T-Mobile and this will allow T-Mobile to integrate their recent success with IoT and government accounts with the strong leadership of the Sprint Enterprise division. Much like Sprint’s acquisition of Nextel, though, businesses will be anxious about the convergence of technologies these two carriers offer. There are few examples of successful acquisitions that have yielded immediate positive impacts within the telecom space, and the challenges before T-Mobile and Sprint’s management teams transcend each department and end user leveraging their services.
We will be tuned in, eagerly awaiting the outcome of the companies’ combined efforts.
Finally, will we see the investment in 5G that the carriers are promising? And will it impact their ability to offer competitive rates and keep stimulating competitive pricing between AT&T and Verizon? We agree with T-Mobile and Sprint’s joint assertion that 5G deployment will be expensive: estimates place the cost of a nationwide 5G network at $1.5 trillion. The combined power of T-Mobile and Sprint should create a vehicle to a successful deployment. Note, however, that T-Mobile has committed to lighting up 30 cities in 2018 with true 5G, while Sprint is promising to light up a nationwide 5G network by the first half of 2019. This leaves many people now wondering what the path forward looks like for these two companies as one. How much work will be done to ensure the future of their converged networks is appropriately structured before the potential catastrophic customer experience of a clunky migration after approval?
Will the cost savings the two companies boast in their announcement be invested in a better support model and better enterprise software for procurement, billing and change management?
Neither carrier has traditionally been strong in customer service and at the core of this deal lies an effort to combine systems from previous acquisitions. Yet there has always been a challenge in the support models T-Mobile and Sprint deploy for their enterprises.
The combination of T-Mobile and Sprint, should regulators approve it, stands to create a respectable foe against Big Red and Ma Bell. This could stimulate more competitive pricing and heighten customer service standards among the Big Three. In addition, T-Mobile and Sprint, as one entity, could hasten the rollout of 5G around the United States. For businesses this would mean access not just to faster connectivity but low-latency speed that supports Internet of Things assets and virtual and augmented realities – critical to remote surgery, telematics and so on.
Pricing from T-Mobile and Sprint should stay competitive or become ultra-competitive, especially as the carriers seek to lure businesses away from the more successful Verizon and AT&T. This holds international implications, too, with Germany’s Deutsche Telekom behind T-Mobile and Japan’s SoftBank powering Sprint (even though its ownership in a joint T-Mobile-Sprint will reduce to 27 percent). The parent companies of Sprint and T-Mobile want to make the most of the deal; much of that means facilitating global connectivity that allows businesses reach into and beyond the United States.
Of course, expect Verizon and AT&T to try to do the same, aiming to capitalize on any bumps T-Mobile and Sprint might encounter, whether from government approvals or integration efforts. This could bode well for enterprises wanting to switch carriers.
To that point, enterprises should watch for account management and service delivery pitfalls as T-Mobile and Sprint meld. Systems and resource integration takes time and rarely happens without setbacks that delay revenue-generating projects. Organizations will want to investigate whether they can hold T-Mobile or Sprint to a guaranteed service level agreement to minimize damage to the bottom line.
Once again, as well, enterprises on the Sprint networks will want clarity on the usability of their devices at T-Mobile. Should they need to upgrade, a subsidy or exchange program would be ideal. And organizations such as hospitals that still rely on pagers will want to understand the extent to which T-Mobile plans to support those older technologies that continue to play an important role in certain settings.
Nonetheless, we will stay tuned in, eagerly awaiting the outcome of the companies’ combined efforts and looking for the positive impacts this will have on the enterprises Sprint and T-Mobile serve.