Newsletter
Back in May, T-Mobile announced that it would acquire most of US Cellular. Wanting to use the wireless spectrum from US Cellular to help improve its coverage in rural areas, it would give it access to four million new customers as well. At least, that’s what T-Mobile told the Justice Department and Federal Communications Commission.
Now, Congress is getting involved. Six senators, all Democrats, wrote in a letter that they believe the plan would raise customer costs and limit choices. In the letter, the Senators write, “Additional consolidation in the market would have far-reaching effects, reducing choices for customers, further concentrating wireless spectrum holdings, and potentially leading to higher prices and other harms for consumers across the country.”
The Senators are right that it would likely raise rates for customers, but the thing to remember here is that US Cellular was only available in about 21 States. This means less than half of the country couldn’t use US Cellular anyway. As of the end of 2023, the carrier currently has about 4.5 million retail connections. US Cellular is the fifth largest carrier in the country, behind Verizon, AT&T, T-Mobile, and Boost Mobile. With the addition of US Cellular’s customers, T-Mobile would remain in third place, but it would be getting even closer to AT&T’s numbers. This is an argument they used to get the Sprint merger approved a few years ago.
Senators also ask the Justice Department to consider unwinding the T-Mobile/Spring Merger
Speaking of the Spring merger, Senators Warren and Klobuchar both raised concerns previously about the T-Mobile acquisition of Sprint. Now, the group of six are asking the Justice Department to consider unwinding the merger. They argue that it costs customers of competing wireless carriers billions of dollars.
In the letter, the Senators noted that the merger “eliminated a low-cost carrier from the market, reducing the competitive pressure on the remaining national wireless carriers to aggressively compete to lower their prices.”
Could the Justice Department reverse course on the Sprint merger? It’s possible. The merger was approved under the Trump Administration, and typically, Democratic administrations are more reluctant to approve mergers like this. In fact, the two tried to merge under the Obama Administration, but that wasn’t going to work out, so they waited for a Republican to get into office.