T-Mobile/Sprint merger no slam dunk: industry analysts

predictions panel
From left: FierceWireless Editor-in-Chief Mike Dano, Mobile Experts Founder Joe Madden, Mobile Ecosystem Managing Director Mark Lowenstein, Senza Fili Principal Monica Paolini and IGR President Iain Gillott share their best predictions for 2019. (FierceWireless)

DALLAS—The big question on many industry minds is whether T-Mobile and Sprint are going to get the green light to finally and officially merge.

According to a group of industry analysts gathered for the 2019 Wireless Predictions Dinner at the FierceWireless Next Gen Wireless Networks Summit 2018 Thursday evening, there’s no easy yes-or-no answer.  

Joe Madden, founder of Mobile Experts, said he believes the government will let it through, but the carriers will have to give up something—spectrum or some other asset to meet divestiture conditions.

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Mark Lowenstein, managing director at Mobile Ecosystem, said he thinks the transaction has a good chance of being approved—there haven’t been any really negative headwinds since they announced their intentions.

Of course, a lot of people focus on going from four to three operators and the impact of consolidation, he noted. Yet if the deal doesn't go through, “it’s a pretty tough road map for Sprint to survive” as a stand-alone company, and there are very few examples in the world where there are four stand-alone profitable, successful and healthy wireless providers. “Three seems to be the magic number.”

“It looks like it’s going to go through,” said Monica Paolini, principal at Senza Fili, which is based in what’s likely to be the combined company’s main headquarters in the Seattle area. “This is where you really need scale.”

Iain Gillott, president of IGR, said he gave it about a 35% chance to go through when it was first announced. “I think it’s more now. I think it’s 50-50.” On the iffy side, there’s a lot of unpredictability in Washington, D.C., and it wouldn’t take much for the deal to get completely flattened by a tweet here or there.

But he would say “yes,” it goes through, with an “and” caveat: “and my ‘and’ is if it doesn’t go through … I don’t think Sprint exists in three years,” he added. Sprint is carrying a lot of debt with a base that’s not growing. And, Lowenstein added, SoftBank sort of “closed the spigot,” and it’s no longer putting a lot of money into Sprint.

Madden noted that the deal is really about a German company buying a Japanese company—to compete with two American companies. If someone were to take a nationalist point of view, that could come into play.

RELATED: Recap: Next Gen Wireless Networks Summit 2018

The tone of the predictions panel was both serious and tongue-in-cheek at times, closing out a daylong event that dealt with everything from the prospects for fixed wireless in a post-LMDS world to the evolution of RAN from CRAN to VRAN and ORAN.

Acknowledging that FierceWireless Editor-in-Chief Mike Dano will probably be asking this same question next year at this event provided all goes as planned, the panel identified some surefire bets for the coming year:

  • Citizens Broadband Radio Service (CBRS) will be launched, something that also might have been said a year ago but now is a pretty safe bet for 2019. The FCC will consider an item on CBRS at its meeting next week. Priority Access Licenses won’t come until late 2019 or probably 2020, Gillott said, but the unlicensed General Authorized Access will get deployed earlier.
  • 802.11ax, now known as Wi-Fi 6.0, will be out, and even though the industry might not be talking much about Wi-Fi, “it’s getting there,”—and it’s a surefire bet, according to Paolini.
  • 2019 is going to be one of the most interesting years for the industry than it’s seen in a long time, according to Lowenstein, taking the broad view and ticking off all the things that are going to happen next year: Real 5G with New Radio, closure of spectrum auctions, a decision on T-Mobile/Sprint and CBRS, to name a few.
  • “We will know a year from now” whether Verizon’s fixed wireless experiment with millimeter wave is successful and whether it’s taking any sort of meaningful share from cable in the markets where it’s launched. All of the major carriers will have launched some flavor of 5G and devices will be in the market. “That’s a lot in 12 months,” Lowenstein said.
  • Expect to see “amazing things in 5G” in China and Korea that aren’t going to be seen in the U.S., according to Madden. Yes, there will be different flavors of 5G from the four big operators in the U.S., but in China, with 250,000 base stations and maybe a couple hundred million phones, “it will be tremendous scale” for 5G and that’s going to start changing the economies of scale and ripple through the supply chain in unpredictable ways. 2019 is going to be very interesting because “we’re going to see this tilt toward Asia,” he said.

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