T-Mobile & Sprint’s $26 Billion Deal Gets Gems From New Adviser

CBx Vibe:2 Phones” Kevin Gates

By CultureBanx Team

  • Fmr. FCC Commissioner Mignon Clyburn advising on T-Mobile & Sprint merger
  • 15% of Sprint users and 14% of T-Mobile users are black

Recently departed FCC Commissioner Mignon Clyburn announced she’s “advising” T-Mobile (TMUS +0.15%) as the company pushes towards regulatory approval for its $26B merger with Sprint. Obama nominee Clyburn is working as a paid adviser and has been seen as an ally to public interest groups who oppose the tie-up. Many people are left wondering if this deal closed and left the U.S. wireless market dominated by three national players, are low-income budget conscious consumers going to be stuck with higher prices and fewer options?

Photo: Mignon Clyburn
Photo: Mignon Clyburn

Why This Matters: Clyburn’s eight-year tenure focused on the needs of low-income and minority communities came to an end last year. She always weighed the human cost or benefit of a decision on things like net neutrality, broadband access and media regulation, which is why her advocacy for this deal is huge for T-Mobile and Sprint, but also a bit puzzling. In 2011, Clyburn actually opposed AT&T’s (T +0.34%) bid for T-Mobile on the basis it was not in the public’s best interest.

T-Mobile and Sprint sell their airwaves to smaller wireless carriers that primarily operate in the pre-paid space and also serve low-income and minority customers. Currently T-Mobile has 38% of the U.S. pre-paid market, while Sprint has 16%, according to S&P. Nielsen’s Digital Media Vice President Jerry Rocha found that 15% of Sprint users and 14% of T-Mobile users are black.

In 2011, Clyburn actually opposed AT&T’s bid for T-Mobile on the basis it was not in the public’s best interest

Americans already pay some of the highest prices for wireless and fixed broadband among all developed nations, so less competition probably won’t fix that. Many critics argue the combined company is interested in competing directly against AT&T and Verizon for higher-income subscribers. Notably, T-Mobile and Sprint have been fighting to grow their low-income customer base. Clyburn stated the companies have already shown their commitment to serving low-income and minority communities and will continue to do so after merging.

What’s Next: Last week T-Mobile and Sprint got another win in their bid to merge when New York’s Public Service Commission approved the deal. The companies have now received approval from 16 of the required 19 state public utilities commissions. They are expecting the deal to close in the first half of this year.

CBx Vibe:2 Phones” Kevin Gates

CONTRIBUTOR

CultureBanx Team

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