Sunday, 26 May 2019

Sprint again leans on China 5G scare tactic to push merger

By Mary Lennighan, for Total Telecom
Friday 05 April 19

Yet another executive attempts to turn sentiment in favour of mobile mega-merger as analysts grow increasingly sceptical deal will pass

A successful merger between Sprint and rival T-Mobile would help the US mitigate China's march towards 5G world dominance, according to the telco's tech chief, who this week took his turn to ensure that the pending deal is never out of the headlines. "China remains the clear leader in the race to 5G with a number of critical advantages…

A successful merger between Sprint and rival T-Mobile would help the US mitigate China's march towards 5G world dominance, according to the telco's tech chief, who this week took his turn to ensure that the pending deal is never out of the headlines.

"China remains the clear leader in the race to 5G with a number of critical advantages. Multiple independent reports show that without aggressive action, the U.S. will not overcome China's progress," Sprint CTO John Saw said in a blog post published on Thursday.

His comments came in a week in which analysts cast further doubt on the likelihood of the proposed merger finding favour with US authorities.

MoffettNathanson Research gave the deal a 33% chance of getting the go-ahead, having previously put the odds at 50%, Reuters reported on Tuesday. The analyst firm said the fact that a number of US state attorneys general appear willing to fight the merger increases the chances of the Department of Justice (DoJ) and FCC moving to block it.

While industry-watchers monitor the swinging of the regulatory pendulum, the telcos themselves are proving tireless in their efforts to reiterate the benefits the deal would bring, lest we forget.

"The proposed merger can create a wireless company with the spectrum assets, scale, and financial wherewithal to propel the US into a leading position worldwide," Saw said in his blog post, repeating statements we have heard both telcos make many times before.

He compared the amount of spectrum held by the major US operators with that in the hands of the big three in China, as well as the advantage China has in network densification and in capital investment potential for 5G.

All valid points, to an extent, but ultimately this is just another attempt to play on US fears over China in order to gain the requisite approvals for the US$26 billion merger deal Sprint and T-Mobile brokered almost a year ago. And the drip, drip, drip of pro-merger rhetoric from Sprint and T-Mobile is looking less likely to win over the authorities than it did last April.

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