The New T-Mobile gets the green light
The endless news and speculation around the industry’s hottest merger deal between T-Mobile and Sprint has almost come to an end as a US federal judge in New York has ruled in favor of the two carriers in an antitrust case spurred by a group of state attorneys. Only a couple days after the news, the New York attorney general has announced that it will not challenge the ruling of the court, thus the merger will get the green as soon as it secures approval from the California Public Utility Commission. But it’s apparently not quite over yet: there are rumblings that T-Mobile parent Deutsche Telekom is pressuring Softbank to renegotiate the the terms of the agreement citing the decline in value of the Sprint stock since the proposal of the final deal in 2018.
The NPD Take:
- The premise of the antitrust case has been about blocking the elimination of a prominent market player to secure the competition, but Sprint’s trajectory has literally made that argument obsolete. The carrier has been spiraling as it has steadily been lowering prices to fight churn, and the declining revenues (and increasing debt) was making it impossible to invest back in the business to stop the bleeding.
- The blending of T-Mobile’s low-band 5G spectrum that excels in coverage but fails in data speeds and Sprint’s mid-band 5G spectrum that promises faster speeds will make the New T-Mobile one of the strongest contenders in the wireless market. The carrier’s commitment to blanketing rural and suburban areas with 5G fixed wireless access will also make it a major threat for the established cable operators (see Rural America Report).
- The merger approval requires Sprint to sell its prepaid assets to Dish, which will emerge as the fourth largest operator to balance the oligopolistic competitive environment. This will be an extremely difficult task for Dish as the low-ARPU nature of the ultra-competitive prepaid business does not promise fast a return on investment. Dish will initially be able to leverage the new T-Mobile’s network at favorable wholesale rates, but the company holds valuable wireless spectrum assets and is planning on launching a cloud-based 5G network solution in the near future.
Samsung unveils the new Galaxy S20 and Z Flip
Samsung has unwrapped its new Galaxy superphones, the S20 series alongside the new Galaxy Z Flip foldable smartphone at a private event held in San Francisco last week. As speculated, the new S20 series will come in three variants (the S20, S20+ and S20 Ultra), all of which support 5G as a standard feature. The flagship model, the S20 Ultra, stands out with a 6.9-inch display chassis that houses a 108 megapixel camera module supporting 8K video capture. The new phones will be commercially available at price points ranging between $999 and $1499 beginning March 6. The new Galaxy Z Flip, on the other hand, has already made its way onto AT&T and Sprint store shelves and carries a $1380 price tag.
The NPD Take:
- The new S20’s 5G support as a standard feature (versus the 2019 flagships’ optional choice) will surely help in rapidly boosting the 5G user installed base, but we need to once again highlight that most consumers will be upgrading to 5G smartphones such as the S20 not because they want/need 5G, but because the new phone they would like to purchase would support 5G as a standard feature. On the other hand, Samsung’s announced partnerships with Netflix and Microsoft (Xbox), as well as new features such as 8K video capture, should give consumers a small reason to consider 5G. You can read more about our full take on the Samsung event in our latest blog.
- Samsung’s $1380 pricing on the Galaxy Z Flip and extended distribution will put a lot of pressure on the new Motorola razr, which beats the Z Flip in design and but trails in terms of specs and price. Incidentally, while the use of a foldable thin glass (versus the razr’s and Galaxy Fold’s plastic screen top) is a major improvement, early reviews suggest that durability continues to be a problem.
Sprint adds 5G to all unlimited plans
Sprint last week announced that customers purchasing 5G smartphones will get 5G speeds in any of its new unlimited plans that start at $60/month. The carrier offers three tiers of unlimited plans, Unlimited Basic ($60/month), Unlimited Plus ($70/month) and Unlimited Premium ($80/month). Sprint has been offering 5G services in a limited number of markets since May, but the service was exclusive to its top-tier Unlimited Premium plan.
The NPD Take:
- Sprint has made a reputation in the market for offering outrageously low prices to entice new customers but the expansion of 5G into all of its unlimited plans is not a part of the typical Sprint pricing craziness. Lack of coverage and compelling services that require 5G speeds has fostered all players to be cautious with their 5G pricing. Verizon, which initially planned to charge an extra $10 for 5G access, shelved that plan within weeks of 5G debut (and reinstated it for the entry-level plan), while T-Mobile and AT&T have so far committed to a no-price-hike regime for 5G.
- Sprint’s decision to allow all unlimited customers access 5G should help the carrier (and the New T-Mobile) boost its 5G user base as customers pick up the new Galaxy S20 and other new upcoming 5G smartphones. These new phones support sub-6 5G frequencies thus customers will enjoy unbeaten coverage when the T-Mobile and Sprint 5G network migration is completed following the merger approval.