The decision Sunday by the boards of T-Mobile and Sprint to merge the two companies is timely in the extreme. What the U.S. needs in order to develop 5G, or critical fifth-generation mobile Internet technology, is competition, and the merger, if it is approved by regulators, will provide competition that neither company could possibly offer on its own.
Competition has given Americans better products, better service, better prices – and a faster-growing economy. But the race to 5G has threatened to become bogged down in complacency. AT&T and Verizon are content with dominating and launching sporadic 5G without a formidable competitor capable of heavy investment in new technology for a broad and deep network. With the merger, all that will change.
The effects of competition have been clear in recent years as T-Mobile’s Un-carrier strategy has forced AT&T and Verizon to adopt more consumer-friendly offerings, and both Sprint and T-Mobile have forced competitors to offer unlimited data plans. By joining together, the new T-Mobile can create even more disruption in the wireless market. Combined, T-Mobile and Sprint will have the scale and resources to reshape the communications landscape for U.S. businesses and consumers.
What will 5G do? While all the details still aren’t final, 5G will likely give your mobile phone a connection 10 times faster than 4G – fast enough to download a 3D movie in 30 seconds (compared with six minutes with 4G). More important, 5G will provide the bandwidth for a larger and more efficient “Internet of Things,” reducing the lag time or latency between devices and the servers with which they communicate, enabling, for example, driverless cars to be far safer.
Currently, the United States is neck-and-neck with our South Korean, Japanese, and Chinese counterparts to develop and implement 5G technology. The country that wins will reap significant economic benefits. AT&T and Verizon are investing in 5G technology but not to the degree they should be, in light of their positions atop one of our most important economic sectors.
That’s where the merger comes in. The new T-Mobile will generate significantly more pressure on all companies in the wireless space – including new entrants from cable – to develop their 5G technology rapidly. T-Mobile and Sprint both bring unique spectrum holdings, R&D bases, and access to capital to carry our country across the finish line in the race to nationwide 5G.
A competitive spirit is America’s great comparative advantage. But competition has been too limited in communications technology, a sector that affects us all. By introducing a powerful new player with a penchant for pro-consumer disruption onto the scene, the merger of T-Mobile and Sprint will have a powerfully positive effect on the U.S. economy.
America has the strongest private sector in the world, but we can’t afford to rest on our laurels. Regulators, policymakers, business leaders – as well as consumers – need to understand what’s at stake with this merger. It’s our best chance to get 5G implemented quickly and broadly, to the benefit of all of us.
James K. Glassman, who introduced Internet technology to American diplomacy as Under Secretary of State for Public Diplomacy (2008-09), is a senior advisor to Sprint. He was formerly a fellow at the Center for Internet, Communications and Technology at the American Enterprise Institute.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.