US path to mid-band spectrum not as simple as some make it seem

Despite many proclamations and posturing during the development years of 5G, mmWave is not living up to expectations, but securing valuable mid-band assets is becoming an increasingly complex project.

As it stands in the US market, T-Mobile US has access to 2.1 GHz spectrum to deliver 5G services. These assets were accessible due to the recently approved merger with Sprint and offers a significant advantage over Verizon and AT&T, both of whom are still operating in the high-frequency airwaves, the mmWave, which delivers high-speed and low coverage for an overall substandard experience.

Over the next 12-18 months, theoretically, more mid-band spectrum should be made available to the likes of Verizon and AT&T, as well as Dish as it expands its offering, through three separate spectrum auctions. However, there is still plenty which can go wrong in the meantime according to Chris Pearson, President of 5G Americas.

“If history shows us anything it is that we have not been very successful at co-operation,” Pearson said during a call with Telecoms.com.

What Pearson is referring to here is collaboration between private industry and public organisations to either harmonise spectrum usage or clearing the bands to offer more power to the mobile service providers. There are success stories, clearing the 1700-2100 MHz airwaves is one, but these outcomes are seemingly more the exception rather than the rule.

The issue with spectrum is simple. High frequencies offer exceptional download speeds but very poor coverage, while at the other end with low-frequency bands a telco can offer excellent coverage, but the download speeds and latency will be woeful. This is why mid-band assets are so important, it is a more palatable compromise between speed and coverage, a mobile experience which can be sold as an upgrade to customers.

When we asked Telecoms.com readers about how important the mid-band airwaves are 68% said without these assets it is impossible to deliver an attractive 5G service. Only 3% said the industry should be paying more attention to mmWave, and 8% believed mid-band spectrum is critical for the moment but its importance would fade behind mmWave eventually.

“Can we move along without it,” Pearson said. “Absolutely. But for the long-term we will need more spectrum.”

As Pearson highlights, there are three spectrum auctions on the horizon which are worth paying attention to. At the end of July, the ‘CBRS’ band at 3.5 GHz will make 150 MHz of spectrum available to the industry. In December, the C-Band airwaves (3.7-4.2 GHz) should be cleared up to make an additional 280 MHz of spectrum available. And the NCIA (NATO Communications and Information Agency) is currently producing a report to free up more assets in the 3.1-3.55 GHz range.

Theoretically, there should be plenty of spectrum available for the mobile network operators to deliver a comprehensive 5G solution, though this is under the assumption that everything runs smoothly.

Firstly, the ‘CBRS’ auction has already been delayed once. It should go ahead of course, but there is always a risk.

Secondly, the C-Band auction, scheduled to take place in December, is currently under threat from legal action. Several smaller satellite broadcasting companies who are being asked to vacate and/or move operations in these airwaves are kicking up a fuss. The aim is to shift the satellite operators in the 3.7-4.2 GHz range into a consolidated 200 MHz block, which would offer plenty of room for the telcos to play around it, but there are dissenters.

PSSI Global Services has filed a lawsuit in the District of Columbia arguing the FCC is crippling the entire industry by forcing through the changes in this spectrum band. Should this legal challenge gather momentum or spin-off into different directions, it could impact the availability of assets in the C-Band range, and subsequently delay the auction.

The final area is another very difficult issue to manage. The report which is being produced for the 3.1-3.55 GHz range has only completed one of six sections. This report is supposed to shed light on what the spectrum is being used for, by whom and ways which it can be rationalised to add more available spectrum for mobile operators. But Pearson highlighted that progress has been sluggish.

The issue seems to be that it is difficult to understand what the spectrum is currently being used for, the incumbents are not being the most helpful as there are confidentiality hurdles to negotiate. No-one officially knows what this spectrum is actually being used for which usually means it is something to do with the military or intelligence services.

Without co-operation from the incumbents, it becomes very difficult to audit these airwaves and create a logical strategy to move forward.

To understand the importance of mid-band spectrum, it is worth looking at the experience being delivered without access.

According to OpenSignal’s most recent analysis of the US market, Verizon is delivering speeds few other international telcos can compete with over mmWave, but this digital dream is only accessible to 0.5% of its 5G subscribers. Elsewhere, for example in the UK where mid-band spectrum is being utilised, there is a speed upgrade (albeit nowhere near as much) but 12X more users are able to access the 5G airwaves.

What is critical about 5G right now is not delivering gigabit speed over the air, there are no applications which require this today, but demonstrating 5G is an upgraded service. Speed and latency improvements are a must, but if the users cannot access them the money spent on 5G networks are a complete and utter waste of time.

The US does of course recognise this situation, Pearson highlighted there is momentum gathering in support of the telcos in Washington, however it is far from an ideal situation. This is a pain point, though there is plenty of risk on the horizon to acting as a blocker for the solution.

What we learned about Dish during the earnings call

With Dish executives leading the company’s quarterly earnings call, details of the plan to crack into the US mobile market were revealed.

The next few years are critical for the US telecoms industry but also the credibility of the FCC and the Department of Justice. Both of these authorities dismissed opposition to the T-Mobile US and Sprint merger, ignoring suggestions it would damage competition. Dish was the reason competition could be maintained, irreversibly changing the US telecoms industry, so it better succeed.

Fortunately, the is being fairly transparent about developments, or certainly more so than most telecoms executives are. But what did we learn from CEO Erik Carlson and Chairman Charlie Ergen last week?

Firstly, $10 billion should be enough to build a nationwide network.

This is a figure which has been banded around quite a lot in recent months without any in-depth explanation, but Ergen believes $10 billion should be enough to meet FCC regulatory requirements and go beyond to create a nationwide network which can compete. There might be a few unforeseen expenditures, spectrum auctions for example, but the team is standing by this estimation.

While the Boost business has not been officially closed yet, the team should have launched in one market by the end of the year, with its own independent core but leaning on the T-Mobile access network. This MVNO agreement will be running for seven years, but the team have already begun talks with tower companies to push forward to create its own network.

What is worth noting is that this work is running independent of the assets which can be purchased from the new T-Mobile company. EVP of Corporate Development Tom Cullen highlighted that deployment planning has begun but once the Boost deal closes, Dish will also have first refusal to acquire cell sites from T-Mobile which are deemed surplus to requirements thanks to the network rationalisation process between T-Mobile US and Sprint.

Although this is detail which some might not have expected, there are still quite a few questions remaining. That said, there is absolute clarity on one area in particular.

“We also took a $356 million impairment charge during the quarter, related primarily to our narrowband IoT build and our satellites D1 and T1,” said CFO Paul Orben. “Now that the T-Mobile/Sprint merger has closed and there is more clarity surrounding our revised build-out requirements. We no longer intend to finish our narrowband IoT build.”

NB-IOT has been struggling to live up to the expectation in numerous markets and this will not help matters. Dish is officially turning its back on NB-IOT, choosing to take an impairment charge on FCC commitments and turn attentions to a 5G network instead of completing the project.

While this might not be the most encouraging of signs, the embracement of OpenRAN and Mavenir as the company’s first official supplier is.

“Marc [Marc Rouanne – Chief Network Officer] continues to work on the architecture and further vendor selection,” said Ergen. “So I would anticipate more of those announcements in the third quarter. And then we’ll share our deployment plans once those are formalized likely on the next call.”

The dynamic of network suppliers is an interesting one for Dish. Ergen highlighted there was a desire to use Huawei equipment, which he described as “best in class”, though the team is being asked to find innovation in new ways. We also found out there is an active dialogue between Dish and Japan’s Rakuten to learn about OpenRAN deployments in the wild.

This is an area many will be keeping a close eye on, not only for validation of a technology which is still not the real deal, but also vendor appointments. The scale of this network, and the aggressive deployment schedule, could force OpenRAN start-ups to grow very quickly. Dish could be a major catalyst for growth for the lucky few who are selected.

It is of course early days, but there are some very interesting developments to keep an eye on here. The team might have opened the door slightly, but there is still much left to discover.

Will the team be able to deploy a network for $10 billion? How will it build its wholesale business unit? When will network slicing begun to be factored in? Which OpenRAN suppliers will be added to the roster over the next few months? Which markets will the postpaid products be launched in first?

With the next earnings call scheduled for July 30, the next three months could offer some very interesting announcements.

Dish adds more credibility to OpenRAN with Mavenir selection

Mavenir has boasted of signing new US entrant Dish as its latest customer, as the emerging telco sets its sights on the most enviable of tasks; a greenfield network deployment.

Like Rakuten in Japan, Dish is able to embrace the OpenRAN movement like few others can around the world. Without being inhibited by legacy technologies or traditional operational models, the Dish team can build a network from scratch, without making compromises or concessions. It is a dream-come-true for any network engineers; the opportunity to deploy a network exactly as you would want to.

“The open and intelligent architecture of our greenfield network will give us the ability to source a diverse technology ecosystem, including US-based solution providers,” said Marc Rouanne, Chief Network Officer at Dish, and former Nokia executive.

“Mavenir will help us lay the foundation for an innovative software-defined network with the flexibility, intelligence and scalability to deliver applications that will redefine the US wireless industry.”

As part of the agreement, Mavenir will provide Dish with a cloud-native OpenRAN software, which the new telco hopes will underpin the US’ first software-defined 5G wireless broadband network.

While the obvious and most proclaimed benefit of the OpenRAN ecosystem is a wider array of suppliers, all promising there is no such thing as vendor lock-in, another significant upside to the OpenRAN movement is on the operational side of the business.

According to Tareq Amin, Chief Technology Officer at Rakuten, commoditised hardware and open software can lead to a 40% reduction in CAPEX costs for network deployment, but it is in the operations team that the real benefits can be seen. Amin has said the operations team should not exceed 350 employees when the entire network has been deployed, compared to thousands which are employed by rivals.

This is a considerable cost saving for Rakuten, which has allowed it to create 5G tariffs to challenge the status quo. At 2,980 Yen per month, Rakuten is offering mobile connectivity services at roughly half the price of competitors. Customers will have to wait for the full network deployment to experience the full wonder of cut-price Rakuten data, but this is an incredibly disruptive move.

The prospect of pricing disruption in the US is a very interesting one, as it is one of the most expensive markets in the developed world for data.

Market Average Revenue Per User (ARPU)
USA 30.85
UK 16.00
Italy 11.55
Netherlands 13.48
Australia 22.65
Canada 36.67

2020 ARPU estimates from Omdia’s World Information Series (USD – $)

Although there has been much protest over the formation of Dish as a replacement for Sprint in the US mobile industry, this is a positive sign. There are of course plenty of hurdles which need to be overcome, however the construction of an OpenRAN network presents the opportunity for Dish to be incredibly disruptive on pricing when it is launched.

Dish only exists thanks to the merger of Sprint and T-Mobile US, though the major opposition to this transaction was on the grounds of competition. Firstly, critics questioned whether moving to three major MNOs was in the best interest of the consumer, and secondly, opponents wondered whether Dish would be able to create an offering which would match more established rivals.

Eyes should be kept on Japan to see whether Rakuten is a disruption or a minor irritation, but the promise of OpenRAN has been very glorious to date.

While the promise of starting from scratch is very attractive to a telco, Heavy Reading Lead Analyst Gabriel Brown notes, that is a significant issue as well. Starting from nothing means there is nothing there and in a country the size of the US, building a nationwide 5G network is no simple task.

One concession forced on Sprint/T-Mobile US by the Department of Justice was to offer Dish an attractive MVNO style agreement for seven years. This was one element bundled into the $5 billion deal to purchase the Boost prepaid service from Sprint. During this seven-year period, Dish will have to build its own 5G network, a monumental task according to Light Reading’s Mike Dano.

Firstly, work has to stop on the NB-IOT network it was currently deploying. Secondly, Dish has got to find the cash to pay for the 5G network. Thirdly, work will begin on the core network, which Dish executives say will be completed within Year One. Finally, comes the access network.

As part of the agreement with the Department of Justice in greenlighting the Sprint/T-Mobile US merger, Dish will have to option to purchase any cell sites which the merger duo plan to decommission thanks to overlap. Outside of these purchases, Dish will have to deploy backhaul and radio equipment into the major cities, with a promise 20% of the US population will be covered by June 2022.

Thanks to the software-defined ambitions of Dish, a significant chunk of this deployment work can be saved, due to the weightier role of the data centre. That said, the US is a country with a population of 328 million spread over 9,147,590 km2, it is 3,937% larger than the UK. As much as we can talk about the advantages an OpenRAN network will offer Dish over its rivals, it will have to build it first.

An optimist will point towards a future where the OpenRAN-powered Dish can offer disruptive pricing strategies, similar to what has been done in India and will be done in Japan, to turn the US telco market on its head. The pessimist in the group will point out this is a company which has never built a network before, with a CTO who has vendor experience not telco, and a country which is monstrously large, geographically diverse and bureaucratically varied.

Dish CEO claims it can compete from Day One

Dish CEO Charlie Ergen has been sitting in a New York court room to defend the approval of the T-Mobile US-Sprint merger, but also insisting his company can compete in the cut-throat telco industry.

This week is a critical one for executives in both the T-Mobile US and Sprint businesses. For the next few days, these men and women will be face-to-face with the 14 Attorney Generals, led by New York’s chief prosecutor Letitia James, in a court case which will decide the future of the business.

With approvals being granted by the relevant regulatory authorities, the last hurdle the duo has to navigate is the lawsuit from the Attorney Generals. These 14 lawyers oppose the merger on the grounds of competition, but Ergen is the star witness for T-Mobile US and Sprint.

“We will compete with the largest operators in the United States, and we’ll compete from day one,” Ergen said in court.

Ergen believes the Dish mobile business will be live within 30 days of the T-Mobile-Sprint merger being approved. At this point, Ergen will get his hands-on Sprint’s prepaid business, Boost. The brand will continue in the pre-paid market for the short-term, though Dish plan to move into the post-paid segment sharpish.

This is perhaps what the judgement will lie on. Will the court believe Ergen? Can this CEO convince Judge Victor Marrero that Dish is a viable alternative to the Sprint business which currently exists?

Looking at the positive side of the argument, Dish has spectrum. It has been competing in the spectrum auctions for years and has a treasure trove, which is currently under threat. Dish has been told to use it or lose it. Another interesting factor is the financing; Ergen claims to have $10 billion lined-up in loans from the banks. Then there is the agreement with T-Mobile US. For the next seven years, Dish will be able to make use of the T-Mobile US network where it hasn’t deployed its own.

These are all interesting points to consider, but then you have to look at the other side of the equation.

Dish has never been in the mobile business. Will it be able to get an effective mobile service up-and-running within 30 days? We’re not too sure. Is $10 billion enough to fulfil the grand promises which have been made to gain approvals from the authorities? If Sprint currently has 50 million subscribers, will the Dish mobile proposition ever reach this mark to maintain the current levels of competition across the US?

These are all queries which will need to be answered. Ergen will be placed under cross-examination from the Attorney Generals, and there are plenty of threads to tug on to unravel this story.

The question which remains is can Ergen prove Dish is a viable replacement for Sprint to maintain the competitive environment which is present today? That is the question which this case rests on.

T-Mobile and Sprint convince Colorado to cross the picket line

The coalition of lawyers fighting against the $26 billion T-Mobile US and Sprint merger has gotten a little bit weaker with Colorado dropping out of the resistance movement.

After the Attorney General for Mississippi secured concessions from the duo, the same has been achieved by Phil Weiser, the Colorado Attorney General. It might be the long-way around, but it does appear T-Mobile US and Sprint are turning some heads with individual, state-level deals.

“The State of Colorado joined a multistate lawsuit to block the T-Mobile-Sprint merger because of concerns about how the merger would affect Coloradans,” said Chief Deputy Attorney General Natalie Hanlon Leh.

“The agreements we are announcing today address those concerns by guaranteeing jobs in Colorado, a state-wide buildout of a fast 5G network that will especially benefit rural communities, and low-cost mobile plans.”

The guarantees are somewhat ambitious. New T-Mobile, how the merged entity is currently being referred to, has promised to deliver 5G with minimum download speeds of 100 Mbps to 68% of the state’s population within three years, and within six years, this coverage will have to increase to 92% of the population.

On the rural side, 60% of Colorado’s rural population will have to have access to 5G download speeds of 100 Mbps within three years of the completion of the transaction, increasing to 74% within six years.

New T-Mobile will also offer new tariffs at lower prices. Should the company fail to meet these commitments it will face $80 million in penalties.

In meeting these concessions, New T-Mobile might face some challenges. Colorado is the eighth largest state in the US at 269,837 km² (the UK is 242,495 km²), with some pretty mountainous landscapes. That said, the population does seem to help these coverage commitments.

Colorado has a population of roughly 5.6 million people, of which 4.89 million live in urban locations. The state has 196 towns and 73 cities, with the five biggest accounting for roughly 1.6 million people (23% of total). Should New T-Mobile cover the ten largest cities with 5G within three years, it would have achieved roughly 38% population coverage, more than half of the commitment made to the State.

With Colorado being a highly urbanised population, only 13% are described as living in rural environment according to Rural Health Info, the equation does not look quite as daunting. Another element to consider is the spectrum assets which will be owned by New T-Mobile.

Although it has been toying with the high-speed mmWave spectrum bands, New T-Mobile will have the benefits of the 600 MHz spectrum offering greater range for meeting the concessions. This will not deliver the eye watering speed which has been promised in perfect scenarios for 5G, though it will aid the demands of network densification. During a trial in January, T-Mobile US claimed a 5G call over 600 MHz could reach 1000 square miles from a single cell site.

Interestingly enough, the merger will also offer access to valuable mid-band spectrum which Sprint has been boasting about for years. Sprint is currently hording licences for the valuable 2.5 GHz band, very similar to the mid-band spectrum airwaves which are being championed in Europe because of the more palatable compromise between speed and coverage. Combining these assets with the mmWave trials puts New T-Mobile in a pretty attractive position.

Alongside the conditions placed on New T-Mobile, Dish will also face its own demands following the completion of the $5 billion acquisition of Sprint’s prepaid brand to maintain competition levels across the country. Dish will have to maintain the HQ in Colorado for at least seven years, hire an additional 2,000 people to work on the wireless business and Colorado will have to be one of the first 10 states Dish launches 5G in. Failure to meet these conditions will result in $20 million in fines.

The win in Colorado is a significant one for New T-Mobile and adds to the momentum gained in Mississippi. In this southern state, New T-Mobile will have to deploy a 5G networ with at least 62% of the population experiencing download speeds of at least 100 Mbps. These numbers increase to 88% within six years of the completion of the merger, though 88% of the rural population will also have to be upgraded to 5G by this time also.

Although this is not the end of the lawsuit led by the New York Attorney General, Letitia James to block the merger on competition grounds, it adds a dent to momentum.

The prospect of tackling James and a herd of 16 Attorney Generals might have seemed like a daunting one, but the divide and conquer strategy seems to be working well here. If the T-Mobile US and Sprint lawyers can convince a few more into ditching the lawsuit, the threat looks significantly lessened.

While there are some states where applying the same conditions as have been negotiated in Colorado and Mississippi would be incredibly difficult, the lawyers don’t have to worry about them. Chipping away at the states where 5G deployment might be a simpler task would certainly lessen the threat being posed by the coalition. There only needs to be another three or four convinced to cross the picket-line and the support for the merger starts to look much more substantial.

Dish said to be close to buying Boost from Sprint

The disposal of assets required to sugar the pill of the T-Mobile/Sprint merger looks likely to be completed by US cableco Dish.

The latest goss comes from Bloomberg, which has been chatting to people who reckon they know what they’re talking about. These mysterious oracles say Dish is ready to drop $6 billion on prepaid operator brand Boost as well as a bunch of other unspecified stuff.

Since Boost has been valued at around $3 billion that’s quite a lot of unaccounted for expenditure. Since US regulators would ideally like a new national operator to be created before it will allow two of them to marge, this probably means some spectrum and whatever else Dish needs to become a viable MNO.

Apparently the WSJ had written a similar story last week so these telecoms Deep Throats are being nice and busy. Presumably they’re affiliated to the interested parties in some way and are floating trial balloons to see gauge broader sentiment on such a deal. None of the share prices of the companies concerned did much in response to the revelations.

Light Reading has reported on commentary from an Analyst who doesn’t think this is a great idea. He notes that it looks like a lose/lose since it takes spectrum away from TMUS/Sprint and cash away from Dish, in both cases depriving them of commodities they’re already short of. But big M&A usually ends up being about the egos of the big shots involved and if all those concerned fancy the idea they’ll probably go ahead regardless.

AT&T suggests Dish and DoJ are collaborating

With AT&T’s WarnerMedia and Dish arguing over a distribution deal, one AT&T executive has suggested Dish and the Department of Justice are collaborating to reverse the green light on the Time Warner acquisition.

The conspiracy theory is hitting new highs here. AT&T is effectively accusing Dish of actively working to create a no-deal situation in negotiations with WarnerMedia over rights to air HBO content. Although having HBO and Cinemax channels go dark on the Dish service would have a negative impact on business, it does coincidentally work well for the Justice Departments case appeal against the Time Warner merger.

WarnerMedia have been in negotiations over the right to air content, with it claiming it offered to extend the previous contract while negotiating but Dish declined. As a result, HBO content has disappeared from the Dish service.

“Dish’s proposals and actions made it clear they never intended to seriously negotiate an agreement,” said Simon Sutton, HBO President and Chief Revenue Officer, in a statement to Reuters.

With the appeal based on the grounds the AT&T acquisition of Time Warner would offer it undue control and influence in the industry, stagnant negotiations certainly add credibility to the objections from the Department of Justice. Manipulating the playing field however, as AT&T is accusing Dish of, is a serious no-no when it comes to the courts.

“This behaviour, unfortunately, is consistent with what the Department of Justice predicted would result from the merger,” said a representative of the Department of Justice. “We are hopeful the Court of Appeals will correct the errors of the District Court.”

“The Department of Justice collaborated closely with Dish in its unsuccessful lawsuit to block our merger,” WarnerMedia responded. “That collaboration continues to this day with Dish’s tactical decision to drop HBO – not the other way around. DOJ failed to prove its claims about HBO at trial and then abandoned them on appeal.”

The $85 billion acquisition of Time Warner proved to be a messy affair for AT&T. While some would have expected some resistance from the industry, the objections of President Trump seems to have encouraged the Department of Justice to chase down every lead, and make life as difficult as possible. The Department of Justice’s appeal against the approval of the deal, is effectively built on the assumption Judge Richard Leon didn’t know what he was talking about.

Publicity stunt? Monopolistic ambition? Nefarious schemes? Whatever the basis of this story, more fuel has been added onto one of the longest running sagas in the telco industry.

CWA, Dish and Altice USA join the T-Mobile/Sprint opposition

With conflicting predictions on the outcome of the industry’s biggest will-they/won’t-they flying everywhere, opposition to the deal from a communications union, Dish and Altice has started to scrap for attention.

The Communications Workers of America (CWA) union, satellite operator Dish and MVNO Altice USA have all aired their grievances, as the industry seemingly turns against the prospects of reducing competition across the US. While we suspect politically-minded individuals actually care very little regarding the concerns of Joe Bloggs, enough resistance from corporations could certainly have an impact on the decision making process.

Mergers of this nature are particularly sensitive to authorities due to the direct impact on competition. The difficulty is focused around the idea of ‘public interest’, a loosely defined term which underpins opinion in a huge number of legal cases in the US. Unfortunately for the US and its citizens, the definition of ‘public interest’ can depend on numerous factors and is rarely 100% consistent.

Looking at the opposition raised in recent days, the focus seems to be around three themes; competition, national security and jobs. Competition is the main focus here, so will get the lion’s share of attention.

When looking to raise support for the transaction, T-Mobile and Sprint executives have pointed towards the idea of consolidated networks and more efficient supply chains to bridge the gap created by AT&T and Verizon at the top of the communications rankings. According to Dish and the CWA, this is nothing more than hot air, as neither organization needs the merger as a means to provide 5G services or could not exist without the deal. As 5G services would be brought without the proposed tie-up, the public interest aspect is questioned as why would it be logical to remove a fourth player.

Another interesting point is the spectrum screen. The FCC gets very fidgety when one telco controls more than 33% of available spectrum in a given region, though should the deal go through, this would be the case across 66% of the US, a landmass which acts as home to 92% of US citizens according to the CWA. Altice USA believes one of the conditions of the deal should be the divestment of spectrum which exceeds the screen, as well as the associated network infrastructure, to improve opportunities for MVNOs and smaller telcos.

But perhaps the most important assertion here is the prevention of competition. Dish has stated the tie up would possible prevent it entering the wireless market with its own offering, while Altice USA has expressed concerns over whether the new organization would honour its own MVNO agreement with Sprint. Altice USA has said it is on track to launch an offering in 2019, though there have been no guarantees its ability to compete would not impaired by the transaction.

Predictions on whether reducing the number of wireless operators from four to three vary quite considerably, though there will certainly be concern if MVNOs start rowing backwards due to the deal. Taking Sprint out of the equation is one problem, but MVNOs disappearing will have another painful impact on competition.

Dish argues customisation of radios, chipsets and devices by the new organization would prevent it from entering the 5G mobile voice/broadband market, or at the very least delay it. Altice USA has pointed to comments from T-Mobile US CEO John Legere, which it believes demonstrates hostility towards MVNOs. Finally, the CWA has suggested the removal of head-to-head competition between the pair would be detrimental, while each has a viable future in the 5G world as a standalone business.

Looking at the other arguments, there seem to be less credibility. On the jobs front, the CWA predicts under the proposed terms of the transaction, 28,000 jobs would be sacrificed. 12,600 would be in the postpaid business, 11,800 in the prepaid and 4,500 in head office roles. As with any merger, there will certainly be crossover and therefore redundancies, though considering the combined workforce of the two organizations is in the region of 80,000-90,000, we can’t imagine redundancies will be as high as 33%.

In terms of national security, the CWA suggests Softbank is too close to Huawei and ZTE. The union quotes Sprint executives, claiming they have praised the technology of the two vendors, though this is hardly a surprise; many telcos around the world have paid compliments to Huawei in particular for the excellence of products, customisation and account management capabilities. Huawei is the market leader for communications infrastructure for a reason.

The national security argument seems to be nothing more than a shallow attempt to rile paranoid politicians who already have a Chinese bee in their bonnet. The link appears to be a smear attempt, attributing comments which are far from uncommon to a single business. It is an underhanded move and undermines the credibility, assuming it has much, of the union.

Although we do not see much substance to the employment and national security arguments, the competition concerns from all three are somewhat justified. Authorities will certainly have some alternative ideas to consider and it tough to see how this merger will be approved within the 90-day targeted window.