The $1.5 billion merger of T-Mobile and MetroPCS is sure to shake up the US wireless industry. The deal combines the nation’s two biggest “budget” carriers into a single entity that will be more equipped to take on AT&T and Verizon.
Customers of both carriers obviously have some reason to be concerned on how they will be affected. The deal will also have consequences for the wireless industry as a whole, too. Let’s address those concerns, and answer your most common questions.
How will things change for T-Mobile customers?
T-Mobile customers are likely to see little change, other than a more robust rollout of its already planned LTE network. The carrier plans to deploy “LTE Advanced” from the outset, which will make its network one of the fastest. The additional spectrum will allow T-Mobile to add more capacity and provide a more stable and reliable service in metropolitan areas, but otherwise the carrier’s customers will see little change.
How will things change for MetroPCS customers?
A lot. Following regulatory approval of the merger, the carriers (which for the near future remain separate in name only) will sell handsets that use T-Mobile’s GSM network. Customers upgrading to those handsets will enjoy a coverage area that is generally more reliable than what they currently have.
All MetroPCS customers will be forced to switch in 2015: that’s when T-Mobile says it will turn off the old CDMA network completely and use that spectrum to improve service for all subscribers.
Will you need a new phone?
If you’re on T-Mobile no, but if you’re on MetroPCS, yes -- but not right away. Customers will have three years to upgrade their phones to those compatible with T-Mobile’s network. NPD analyst Eddie Hold says that such a switch shouldn’t be a big issue given MetroPCS customers typically upgrade their devices on a yearly basis.
“This is a good thing for MetroPCS customers,” Hold says. “They will ultimately end up with a wider range of device choice -- and potentially lower-priced devices.” So upgrading will likely be much less painful on the wallet for those customers than it was before.
Will Sprint become more competitive?
That is unclear. What it may do is complicate any potential merger between T-Mobile and Sprint, which has been discussed for years. “This is first because of the integration challenges both companies would be facing, and second because they would be larger players before they merged, which would make it tougher to gain regulatory approvals,” Informa analyst Mike Roberts says.
Roberts did note that a combined Sprint and T-Mobile entity, even with MetroPCS, would control about a third of the market, putting that combined company on equal footing with both AT&T and Verizon, which also control about a third of the market each.
How does this change things for other budget carriers?
Other budget carriers, like US Cellular and Leap, now are in a much less favorable position.
“If you’re Leap Wireless, you’re feeling pretty isolated right about now,” Hold argues. Roberts agreed, adding that these companies might find themselves in a position where they too will look for a larger suitor, further consolidating the wireless industry.
That is potentially problematic, too: consumer groups argued during the AT&T/T-Mobile merger process that consolidation is bad for the industry and would result in higher prices, and likely would do the same here.
Should you jump ship if you’re tired of AT&T or Verizon?
For customers of the big two, a wait-and-see attitude might be the best bet. The true benefits of this merger are still years down the road, as T-Mobile must first migrate all MetroPCS customers off that network before it can use the spectrum.
At the same time, T-Mobile’s soon-to-be launched LTE Advanced network will (at least for a short time) be the fastest wireless data around. So if high-speed data is what you’re pining for, then switching to T-Mobile might be a good choice.
This story, "T-Mobile, MetroPCS merger: Your FAQs answered" was originally published by TechHive.