T-Mobile and Sprint “merger”: a sign of the times
On Sunday April 29 the United States’ two biggest telecoms operators, T-Mobile and Sprint, announced the completion of what they are calling a business merger, a $26 billion deal that will greatly reduce US users’ already limited choice: Sprint will be consumed by T-Mobile, led by former its former CEO and COO, the legendary John Legere and Mike Sievert respectively. Sprint’s former CEO, Marcelo Claure, and the CEO of its majority owner, Japan’s Softbank, Masayoshi Son, will be given seats on the board of directors.
The idea of a merger between T-Mobile and Sprint had effectively been blocked by the Obama administration because it will leave the low-cost segment of the market, based on cheaper rates, prepayment, etc. in the hands of a single company with no competitors. But new talks under the most corrupt administration in the recent history of the United States have borne fruit. This is due to Federal Communications Commission (FCC) boss Ajit Pai, a telecommunications industry lobbyist, a decision akin to putting a member of the Mafia in charge of the gaming commission: a man focused solely on creating maximum profit for the companies that used to employ him. Needless to say, the move has been backed by Donald Trump, for whom the needs of big business always come first, regardless of his populist rhetoric.
What has President Trump been told to win him over to the merger? Presumably that it is “good for America” and will create jobs, which as anybody with any experience of business knows, tend to result in mass layoffs, and also that it will, for some reason, strengthen the United States’ position in its race with China to develop and control the world’s 5G networks. The mounting confrontation between the United States and China means that growing numbers of Chinese companies, many of them pioneers in telecommunications research, are being forced to adopt a plan B if sanctions force them to be self-sufficient.
The T-Mobile and Sprint deal is a sign of the times: a corrupt administration, lobbyists in charge of regulation, and a president who can be swayed with the simplest arguments. This isn’t going to end well.
(En español, aquí)
