Would You Allow This To Proceed? Why or Why not?
The merging of Sprint and T-Mobile is a benefit to the public, as this will lead to increased capacity, which will improve access and convenience to consumers (Daidj, 2015). This is also a boost in the telecommunication market, which will also result to increased innovation in the communication technology market (Daidj, 2015). The merging of these two companies will also lead to saving and better utilization of the limited resources. This will enable the two companies to expand their market share, which will create and improve value to the stakeholders (Daidj, 2015).
Merging of two companies is aimed at improving the strength and profitability of the two companies, which results in increased shareholder’s returns (Daidj, 2015). When two competitor companies merge, consumers benefit from improved services, which retain the customer base (Daidj, 2015). With a slight difference in their services where T-Mobile focuses on wireless communication where else Sprint provides mobile applications, this merging will improve customer satisfaction. Customers are now able to access all mobile related services through one provider, which also improves customer’s experiences and value for their money (Daidj, 2015).
Does China Have Something To Do With This?
China has influenced the merging of the two companies (The New York Times, 2018). The major reason for the merger between T-Mobile and Sprint is ensuring that American companies remain competitive in the world (The New York Times, 2018). This is attributed to the rising competition from Chinese companies, which have also integrated strategies to incorporate the fifth generation wireless technology (5G). With the threat from Chinese companies, this announcement is meant at persuading the Federal government to approve the deal (The New York Times, 2018). This is because a previous attempt to merge the two companies had been previously blocked by government regulators in a bid to protect the citizens of America by arguing that shrinking the telecommunication market would reduce the choices of consumers, which would result in higher prices negatively affecting the consumers (The New York Times, 2018).
Does It Bother You That If This Merger goes Through, German and Japanese Owners (Deutsche Telecom and Softbank) Will Consolidate Telecom Positions in the USA (They Each Have Strong Ownership of Sprint and T-Mobile respectively)? Why or Why not?
If the merger goes through, German and Japanese owners who have a strong ownership of Sprint and T-Mobile respectively will consolidate telecom positions in the United States. This will result in a converged market, which will affect job creation in the United States (Daidj, 2015). This will also reduce the number of national carriers as telecom may be consolidated to save on costs. This will reduce competition from other companies and can lead to increased prices affecting the consumers (Daidj, 2015). The only companies left will be Verizon Wireless and AT and T Mobility which will face stiff competition from T-Mobile and Sprint Corporation. Due to the slowing momentum of T-Mobile, which is a branch of Telecom, the merger would positively impact Telecom through the consolidation of the company to the merger (The New York Times, 2018).
Daidj, N. (2015). Developing strategic business models and competitive advantage in the digital sector. Hershey, PA: Business Science Reference.
The New York Times. (2018). Pitch Behind T-Mobile-Sprint Merger: Keep Up With China in 5G. Retrieved from https://www.nytimes.com/2018/04/30/technology/tmobile-sprint-china-5g.html