Competitive Effects of T-Mobile/Sprint: Analysis of a "4-to-3" Merger

Mergers in the mobile telecommunications industry are of keen interest to policymakers and scholars. This sector often experiences high concentration levels, driven by pronounced economies of scale and scope, alongside substantial regulatory barriers to entry created by radio spectrum allocations. Hence, antitrust authorities frequently struggle with the tradeoff between the benefits of enhanced synergies and the potentially adverse effects of increased market power. This tension results in varied outcomes from regulatory agencies when approving (or blocking) mergers. Between 2012 and 2016, for instance, four E.U. nations (Austria, Ireland, Germany, and Italy) allowed the consummation of “4-to-3” mobile telecommunications transactions, while the U.K. and Denmark blocked similar combinations. In the U.S., the Federal Communications Commission (FCC) rejected “4-to-3” mergers in 2011 and 2014, yet approved the T-Mobile acquisition of Sprint in April 2020—a decision that continues to spur debate. This Article examines the T-Mobile/Sprint post-merger evidence of retail mobile subscription prices, network investment, service quality, market share, and industry profits in the U.S. mobile communications industry. Our findings suggest that the T-Mobile/Sprint merger has led to consumer benefits, challenging arguments claiming negative impacts due to the carriers’ consolidation.