May 3 John Legere took a dangerous gamble basing his campaign for T-Mobile-Sprint on a falsehood, that the deal would deliver much faster 5G, sooner, and that would produce $billions in social gains. I immediately knew his claims were bogus.
The deal had a 50-50 chance on Monday but is plummeting as FCC & DOJ get woke. This is the summary; six articles from the last few days are linked in the text and below.
A smoking gun: From Bell Labs with LTE & 5G the same
The New York Times may have killed the merger with “The Implausible Promises of a T-Mobile-Sprint Merger.” Maybe the lethal blow came at the BK 5G Conference last Wednesday,I found low-band “5G” is little better than 4G LTE, apples to apples. Former FCC Chair Wheeler used the 25% estimate.
The only way the new T-Mobile could bring 5G sooner is to build it in 2017. That would be difficult.
I believe Time Machines are still science fiftion. The biggest problem Tmo has is Neville Ray is already building a state-of-the-art network. Tmo has a live cell of LTE/LAA running at 500 MHz in Manhattan. Legere has promised 30 cities with 5G in 2018 and "The entire country in 2020 including even all small roads." Buying Sprint isn't likely to speed things. Tmo has enough spectrum and towers for years.
Tmo's 600 MHz "5G" will not be much faster than 2018 style LTE and certainly not “a seismic shift." The best estimate is 25% to 50%, maybe lower. That's probably less than the 200% improvement over the last few years.
Technology is bringing down the cost per bit at a ferocious rate, One Verizon estimate is 40%/year, Pricing per gigabyte almost always goes down in wireless and probably would even in a monopoly. The right question is will prices be higher with the merger or without? Rewheel has five years of data from eight European countries that are convincing.
Legere made "much better wireless, sooner" the center of his merger justification. WTF! So I grabbed my data and wrote a 9 part fact check Sunday after the announcement, partly as a favor to other reporters. I made it as neutral as I could. Loads of datapoints, if that's your thing.
Just the facts. On the effects of 4-3; On whether 5G will come faster; "Combining is the only way they can fight back against the two industry leaders;" On whether Sprint could survive without the merger; On whether Sprint could survive without the merger; On whether the T-Mobile 5G is a "seismic shift;" 5G is not 5G: Much will not be the truly high speeds of millimeter wave; Is even the real 5G, millimeter wave, revolutionary?; "5G offers more reliability than 4G or LTE"; Is 5g required for autonomous cars? More
I'd been researching 5G speeds intensely. Millimeter wave is fast - the channels are 400 MHz - but low-band, like T-Mobile's 600, is little more than LTE with a software tweak (New Radio.) By April 18th, I had No “Material Difference Between 5G & LTE” * LTE Latency Today 9s. Down to 2 ms. ~2019 and 5G The Same Speed As 4G: 2 Gig 4G LTE At MWC From Qualcomm. All were backed by two sources, engineers very senior in the industry.
Last Wednesday, a definitive expert estimated between 25% & 50% and others were a little lower. That's probably less than the 200% improvement in the last few years. I had a good technical story for my readers building networks.
Sunday, Legere based a $26B merger on claims all his technical people knew were unsupportable. He needed to fool almost all the people in Washington, and Sunday the main reporters went along. The legendary lobbyist Jim Cicconi might have pulled it off. He knows not to say things easily disproved.
Late Sunday, I sent to reporters the evidence on speeds and timing. Folks including Mike Dano found statement after statement from Legere and Claure that had committed to essentially the same builds without the merger. I.e., there was minimal consumer benefit. Since there was no likely 5G speedup, it did nothing for Ross (and Trump) who are spooked by the Chinese pulling ahead of the U.S. The 25% figure was picked up from Poland to Thailand. Tuesday, The Times published “The Implausible Promises of a T-Mobile-Sprint Merger.” The grey lady doesn't come out and say "lies" unless it's Donald Trump.
Wednesday morning, former FCC Chairman Tom Wheeler wrote an interesting piece for Brookings with the 25% to 50% number and a link. Anyone awake in Washington is looking at the data.
Wheeler pointed out you could get most of the same benefits if Sprint and T-Mobile shared a network but otherwise continued competing. Tom's an old hand and may remember BellSouth and AT&T Wireless doing a joint network in New York. The CFO of BellSouth said they saved hundreds of millions. That's exactly what Britain plans for 5G. The four carriers would form two consortia and only build two 5G networks.
Ajit Pai, the key decisionmaker, is a brilliant lawyer who I think is an honorable man. Our politics are different. I'm on the left, he's a leader of the anti-Government Federalist Society. My progressive friends mostly consider him a corrupt hack because he killed Net Neutrality and more. I'm pretty sure that's totally wrong: he made those decisions because he's a true believer. Smart conservatives know, as Kevin Martin says, "You can't have competition without competitors." Pai soon realize what they are telling him is a crock and I hope make the right choices.
One network is cheaper than two, Two networks are cheaper than four, Four are cheaper than five to seven, usually necessary for competition to work well. (It's an exception if Xavier Niel owns one,)
Competition is great, but many countries have decided the cost is too high and are only building one or two in many places. (England, Australia,...)
Unfortunately, effective regulators are a rare species, especially in D.C.
Written this week