Merging Sprint and T-Mobile Makes Technical Sense

T-Mobile and Sprint look like they have very different networks, but they're headed in the same direction: 5G. The two companies' spectrum assets match up well for a 4G/5G future in a way that wasn't true when they proposed to merge in 2013.

I will note that this merger is still a bad idea for other reasons: reducing our market to three major players will lead to higher prices, and the "savings in sales and marketing costs, store fittings, advertising, customer support, repairs, and logistics" promised by T-Mobile's parent DT means US job losses.

But from a technical perspective, it's a great idea. Here's why.

Goodbye 2G, Hello 5G

One of the major arguments against the merger in 2013 was that Sprint runs a 2G CDMA network and T-Mobile runs a GSM network. Those two technologies aren't compatible. But CDMA as a technology is now on its way out. Sprint hasn't been able to set a sunset date because it doesn't have an LTE network that matches its 2G coverage, but T-Mobile's network will get it there. Everybody wants to turn off CDMA.

Phone-wise, Sprint's flagship smartphones sold in the past three years—including iPhone 6 and up Samsung Galaxy S6 or later—all support T-Mobile's LTE network for voice and data, at least to some extent. Subscribers may want to upgrade their phones to get better coverage, as earlier Sprint models are missing some T-Mobile bands, but only owners of low-end or very old phones will be forced to upgrade.

Those customers are likely to upgrade in the next two years anyway, because 5G launches next year. So don't just look at the two networks in terms of 4G LTE; both have to start setting aside spectrum for 5G, as well. With both, the combined network would own a deep bench of spectrum nationwide.

Indeed pic.twitter.com/ggG9wktZ7o

— Andrew Miceli (@Mosaik_Andrew) April 29, 2018

T-Mobile has LTE on 600MHz, 700MHz, 1700MHz, and 1900MHz. It's setting aside some 600MHz for long-distance 5G and looking at millimeter wave (28GHz and higher) for urban 5G.

Sprint has LTE on (a little) 800MHz, 1900MHz, and (a lot of) 2500MHz. It's setting aside a lot of 2500MHz for 5G.

Looking at how the two sets of spectrum lock together, Sprint is very weak on rural and wall-penetrating, low-band spectrum, and T-Mobile has collected a lot of that in the past few years. T-Mobile, on the other hand, lacks mid-band spectrum for 5G, which can balance decent range and high capacity, and Sprint's 2.5GHz is perfect for that.

Both carriers have a lot of towers placed appropriately for 1700MHz and 1900MHz, and T-Mobile's 700MHz towers will work well with Sprint's 800MHz. It's a terrific fit.

Folks concerned with rural coverage should be excited about that combination of 600/700/800MHz, all of which has great range. In that case, the only thing stopping the combined company from beating Verizon with coverage in rural areas is tower-siting issues: permits, installation costs, and the availability of staff to build them out.

According to Mobile World Live's Diana Goovaerts, the combined company plans to drop from 110,000 to 85,000 macro cell sites, but boost its number of small cells (largely urban, and often for 5G) from 10,000 to 50,000.

Putting the two networks together could change T-Mobile's tune on 5G speeds, to be sure. When T-Mobile exec Karri Kuoppamaki set expectations relatively low at a conference last week, it was because he was talking about a network primarily on 600MHz spectrum, which has great range but less capacity than higher bands. Sprint's 2.5GHz would supercharge capacity and speeds in urban and suburban areas.

Also, all respect to Sprint's CTO John Saw, but T-Mobile's CTO Neville Ray is a complete genius when it comes to complex network builds. Ray is the architect of T-Mobile's spectacular network growth over the past several years, and he pulled off the merger of T-Mobile and MetroPCS's networks better than Sprint has done so far with either Nextel or Clearwire. If he's still involved, the integration will go well.

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This Is Still a Bad Idea

Not every good technical idea is a good idea for society.

This merger will likely lead to a clear-cutting of redundant mall stores, a reduction in call center jobs, and huge unemployment in Kansas City, where the merged company will kill off Sprint's headquarters. DT is speaking out of both sides of its mouth on jobs, simultaneously promising regulators that it will increase employment while telling investors it will have radically lower costs.

No matter what T-Mobile's execs say, the merger will probably drive up consumer prices as investors demand higher returns from the merged company, and a lack of Sprint as a challenger means T-Mobile will be able to raise its rates to AT&T's and Verizon's levels. The merged company will also have a huge amount of debt to deal with, which will siphon money away from the higher rates to disappear into the pockets of bondholders, with no benefit to consumers.

As I've said several times, the Canadian wireless market shows what we could become. Our annual network tests show that Canada's three major carriers have terrific speeds and high-quality coverage—as well as high rates and no unlimited data plans. That's what you get with less competition. So we still disapprove of this merger. But from a network perspective? It's a great idea.

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