Buoyed by AT&T's merger win this week, Sprint and T-Mobile are expected to officially file their merger application with the FCC this week as a wave of M&A mania continues in the Trump era. Given the agency's willingness to green light every industry whim, the Ajit Pai FCC is generally seen as likely to be a rubber stamp to the deal, which would combined the nation's third and fourth largest wireless carriers. It's the second attempt to merge in as many years after previous attempts were blocked by regulators due to anti-competitive concerns.
And while the DOJ could apply some modest conditions to the deal, last week's
massive court win by AT&T is generally seen as reducing the likelihood that the DOJ will intervene to stop many more megamergers.
While Sprint and T-Mobile executives have been making the rounds insisting that the deal will result in faster speeds and lower prices for consumers and more jobs for employees, that's generally not how it works in telecom. Analysts say in reality the deal is likely to result in the elimination of anywhere between 10,000 and 30,000 jobs as redundant retail, management and support positions are inevitably eliminated.
And while Sprint and T-Mobile say that combining will create a stronger competitor to AT&T and Verizon, that's also generally not how things work, especially in the oft-broken telecom sector.
The elimination of one of just four major wireless competitors is more than likely to result in a reduction in overall price competition. Despite a lot of bluster from the industry, overall price competition was already down in 2018, and is likely to shrink further in the wake of fewer overall competitors. This is a major reason why AT&T and Verizon have shown no real resistance to the idea, something they likely would if the combind company did pose a genuine competitive threat.
Granted many Millennials aren't old enough to understand that these types of deals tend to end up badly for everybody but company executives, and are about to get a crash course in the chasm between merger promises -- and merger realities.