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New Research Shows Why the Sprint/T-Mobile Merger Could Be a Disaster for Your Wallet

Illustration for article titled New Research Shows Why the Sprint/T-Mobile Merger Could Be a Disaster for Your Wallet
Image: Getty

Despite a lengthy process that started way back in the spring of 2018, today Sprint and T-Mobile agreed to extend the deadline for their proposed merger another two months until June 29th. However, even if the FCC ends up approving the deal, after seeing a new study by mobile data analysts Rewheel, it’ll be hard to feel good about living in a country with just three major cellular providers.

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In Rewheel’s most recent version of its 4G pricing study which covers the first half of 2019, data shows that in countries with three MNOs (mobile network operators), the median price of 1GB of data is 113 percent higher than compared to a typical country with four MNOs.

Illustration for article titled New Research Shows Why the Sprint/T-Mobile Merger Could Be a Disaster for Your Wallet
Graphic: Rewheel
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Unfortunately, for us here in North America, things get even worse because while the U.S. is, essentially, a four MNO country (AT&T, Verizon, T-Mobile, and Sprint), the median price for a gig of data comes out to about 4.5 euros, which is three times higher than the median for a typical four MNO country.

Illustration for article titled New Research Shows Why the Sprint/T-Mobile Merger Could Be a Disaster for Your Wallet
Graphic: Rewheel

Meanwhile, for our neighbors to the north in Canada, prices are almost comically bad with the cost of a single gig of data going for 7.3 euros, compared to 2.9 euros for a typical three MNO country. Furthermore, the price of 4G data plans in Canada is 24 times more expensive than a similar plan in Europe, while the U.S. fared only slightly better with plans here rating 15 times more expensive. The only other country in the study with such anomalous data pricing is Japan which, like the U.S., suffers from data prices 15 times higher than the median prices for a four MNO European country.

Illustration for article titled New Research Shows Why the Sprint/T-Mobile Merger Could Be a Disaster for Your Wallet
Graphic: Rewheel
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But perhaps the most telling metric is the cost of the least expensive data plan with at least 20GBs of data in the U.S. and Canada compared to what’s available in Europe. In Canada, the cheapest plan you can get with 20GB of data plan costs 67 euros, while in the U.S., that same plan costs about 36 euros. In either case, that’s at least double (or quadruple for Canada) the price of a typical European data plan.

To bring this back home, as part of its merger plan (and to entice potential regulators), T-Mobile and Sprint have said that if a deal goes through, it will not raises the price of cell phone plans, including the price of 5G data when those new networks go live. However, with U.S data prices for 4G data already being significantly higher than what’s available in most European counties, that’s not exactly a huge comfort. And this what things look like now under a four MNO regime, and a not a three MNO system like the U.S. would have if a merger does get approved.

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For a closer look at Rehweel’s data, feel free to click here and check out the full report yourself.

Senior reporter at Gizmodo, formerly Tom's Guide and Laptop Mag. Was an archery instructor and a penguin trainer before that.

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DISCUSSION

This might be the dumbest crap ever written. You cannot compare the US market with EU countries as the regulatory issues are massively different. As far as Canada, the land mass is larger than the US and the population is less than 50 million. The cost of running fiber is higher, the cost of building towers is higher, therefore the price is higher. The US has some of the lowest costs for cell service. In fact, Verizon being the most expensive has trouble meeting its fixed costs. This is exactly why a merger makes sense, it is called economy of scale. Both Sprint and Tmobile pay more per user for fixed costs thereby limiting capital expenditures on network expansions. Remember Sprint is the only network built from the ground up. The other three are patch work of purchased networks. This means investors in these failed cell companies subsidized much of the cost of building the current networks. As we move into networks that require lower spacing of towers and use of pico cells the same advantages will not be there. Each network will have to be rebuilt. This puts both Sprint and Tmobile at a massive disadvantage in the current market. This could lead to one or both being liquidated.... Welcome to reality.