T-Mobile merger will help us defeat China – Sprint CTO

The propaganda assault to validate the T-Mobile US and Sprint merger shows no signs of slowing, and now Sprint is suggesting it will help the US defeat those pesky communists.

Jamie Davies

April 5, 2019

4 Min Read
Tense relations between United States and China. Concept of conflict and stress

The propaganda assault to validate the T-Mobile US and Sprint merger shows no signs of slowing, and now Sprint is suggesting it will help the US defeat those pesky communists.

Fear is tried and tested strategy to accomplish one’s ambitions, and Sprint is stirring the xenophobic pot. Just as President Trump used fear to justify his wall, and UKIP roused curtain twitchers to abandon the European Union, Sprint CTO John Saw is leaning on the Chinese threat as a means to legitimise the proposed merger between his firm and T-Mobile US.

“We are proud that the 5G potential of our proposed merger with T-Mobile has already spurred progress in the US, but China remains the clear leader in the race to 5G with a number of critical advantages,” said Saw in a blog post. “Multiple independent reports show that without aggressive action, the US will not overcome China’s progress.”

Saw is not implying any threat directly, but the world has already been done for him. Such is the intensity of the anti-China sentiment over the last couple of months, the mere mention of the country will get patriotic and paranoid US citizens and politicians fidgety. China is the enemy, or so the rhetoric tells us, they can’t win the 5G race, that would be un-American.

Whether a merger between T-Mobile US and Sprint would bridge the chasm which has developed between the two nations is slightly contentious, though Saw does have some valid points when it comes to the readiness of the US in comparison to China.

From a spectrum perspective, Saw claims no US telco has sufficient access to all three layers of spectrum (low, medium and high) for a genuine nationwide mobile 5G network, though Chinese telcos do. Some suggest China effectively gives spectrum away for free, as theoretically this encourages network rollout as there are more funds available. Sceptics will undermine this theory, though as Saw points out, China’s operators have large amounts of unencumbered 2.6 GHz, 3.5 GHz and 4.5 GHz spectrum for 5G.

Of course, should the merger be approved, the new T-Mobile company would be able to ride to the rescue, combining the spectrum holdings of the two organizations into a portfolio which can deliver nationwide 5G.

In terms of network densification, this is another area where the US is behind the Chinese, and a critical issue if 5G is to deliver the promised results. China currently has approximately 1.9 million sites, compared to 200,000 across the US, having built 350,000 over the last three years whereas the US has constructed 30,000 new sites.

Some might point to the difference in population the two countries, 327.2 million citizens in the US vs. 1.386 billion in China, though network density is certainly better in the far East. As it stands, the US has 4.7 cell sites per 10,000 people, while this number is 14.1 over in China. A merged T-Mobile business would have access to 3.3 sites per 10,000 POPs, compared to an average of 4.7 for Chinese telcos. This does not create parity, but according to Saw it is a better position.

Saw points towards regulatory difficulties in the US in slowing down progress being made. Merging two of the telcos would reduce the bottleneck, therefore allowing greater freedoms to the telco to roll out 5G infrastructure.

This also leads onto the investment case. A merged T-Mobile and Sprint business will be able to more efficiently invest a promised $40 billion to scale the network. China has been leaps and bounds ahead of the US when it comes to capital investment for years, this is no surprise.

While some of the statistics being put forward by Saw are interesting, there is nothing new being presented and we are sceptical a merged T-Mobile and Sprint business would counteract these points in any notably manner. It does seem to fit in quite well to the lobby mission to get the merger approved, though we hope people don’t get too distracted by the PR plug here.

Bringing China into the equation is an excellent move from Sprint. All the hard work of making China the bad guy has been done, and Sprint is exploiting this position perfectly. The telco is not over-egging the pudding, but enough of the arch-enemy has been mentioned to get people thinking.

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