This deal makes a lot more sense from a business perspective. They simultaneously improve coverage and acquire customers. Building out is much more time consuming with uncertain return on investment.
Currently US Cellular and T-Mobile are profitable so they can each grow their business and make cellular service even more competitive. But post merger there’s few reasons to add a bunch of cell service anywhere.
Why wouldn’t regulators allow it? Since the Sprint merger this industry has been a three horse race. This doesn’t meaningfully remove competition for the average American consumer. What it does accomplish is strengthening T-Mobile’s rural coverage, which is really their last remaining major weakness. Now they can hopefully compete with Verizon and AT&T on more equal footing.
I suspect they will allow it, but that doesn’t mean it’s a good idea.
Each of them are already competitive enough to attract customers and be profitable. They might not be targeting you yet, but reinvesting into growth is all about finding new ways to cut into Verizon and AT&T and thus attract new customers. Post merge I suspect the goal will be cutting redundancy which is good for shareholders, but not really customers.
Considering the economics around cellular in rural developing nations, I suspect a US carrier could operate a nationwide network on something like single digit percentage of total customers. There’s a lot of room for competition.
As a current T-Mobile customer I am looking forward to the improved rural coverage this merger should provide. Not all mergers are bad. I used to be a Sprint customer and service is much better now that T-Mobile bought them.
There are still 2 remaining major carriers that will provide plenty of competition to keep T-Mobile in check.
