News that the Department of Justice is approving the $26 billion merger of Sprint and T-Mobile coincided with the latter carrier’s Q2 earnings call. When asked about MVNOs and how those deals will be impacted by the merger, T-Mobile executives pledged continued support for existing partnerships, like Google Fi.
The Google MVNO leverages US Cellular, Sprint, and T-Mobile in the United States. Both deals that Fi has with the latter carriers will be “inherited by the new company,” with T-Mobile executives stating (h/t Dieter Bohn) that it “won’t be killing or canceling any MVNO deals.”
Earlier this year, Google expanded its MVNO deal with Sprint to offer 5G on compatible phones moving forward. That service will be available on “Sprint 5G compatible” phones that are “Designed for Fi.”
In fact, T-Mobile made the case that the new company will be a “bigger friend to the MVNOs than the stand-alones,” a clear reference to AT&T and Verizon. COO Mike Sievert said:
I mean the massive capacity that we are creating with this new network creates the incentive for us to want to be a provider to MVNOs. Now, those arrangements, you know, each have different durations and they have different pricing aspects to them. We’ll just carry those forward to their expiration. And then, you know, obviously a piece of this is that there will be an opportunity for them to go forward throughout the seven years.
CEO John Legere used the analogy of a stadium to explain why the Sprint and T-Mobile merger has an incentive to work with MVNOs to ensure that the network is being fully utilized:
We’ve said throughout the process. When you invest in the network and you have an eight-fold increase in capacity, you have a stadium that’s got a lot of empty seats. We therefore cherish the relationship with MVNOs as a way to have the utilization of our network continue.
They also revealed that current MVNO deals are “easily handled with a small percentage of our network,” with performance only improving as service grows over the next three years.
FTC: We use income earning auto affiliate links. More.