Home » Sprint » Recent Articles:

T-Mobile, Verizon Wireless Achieve Top Scores in Mobile Performance Report

Mobile broadband performance in the United States remains nothing to write home about, achieving 43rd place worldwide for download speeds (between Hong Kong and Portugal) and a dismal 73rd for upload speed (between Laos and Panama). With this in mind, choosing the best performing carrier can make the difference between a tolerable experience and a frustrating one. In the first six months of 2018, Ookla’s Speedtest ranked T-Mobile and Verizon Wireless the two top carriers in the U.S.

From January through the end of June, 2,841,471 unique mobile devices were used to perform over 12 million consumer-initiated cellular network tests on Speedtest apps, giving Ookla insight into which carriers consistently performed the best in different cities around the country. The results showed average download speed of 27.33 Mbps, an increase of 20.4% on average since the same period in 2017. Upload speed achieved an average of 8.63 Mbps, up just 1.4%.

Achieving average speeds of 36.80 Mbps, first-place Minnesota performed 4 Mbps better than second place Michigan. New Jersey, Ohio, Massachusetts and Rhode Island were the next best-performing states. In dead last place: sparsely populated Wyoming, followed by Alaska, Mississippi, Maine, and West Virginia.

T-Mobile’s heavy investment in 4G LTE network upgrades have clearly delivered for the company, which once again achieved the fastest average download speed results among the top-four carriers: 27.86 Mbps. Verizon Wireless was a close second at 26.02 Mbps. Verizon’s speed increases have come primarily from network densification efforts and equipment upgrades. Further behind was AT&T, achieving 22.17 Mbps, and Sprint which managed 20.38 Mbps, which actually represents a major improvement. Sprint has been gradually catching up to AT&T, according to Ookla’s report, because it is activating some of its unused spectrum in some markets.

Your Device Matters

Which device you use can also make a difference in speed and performance. In a match between the Apple iPhone X and the Samsung Galaxy S9, the results were not even close, with the Samsung easily outperforming the popular iPhone. The reason for the performance gap is the fact Samsung’s latest Galaxy phone has four receive antennas and the iPhone X does not. The iPhone X is also compromised by the total amount of LTE spectrum deployed by each carrier and the fact it cannot combine more than two spatial streams at a time. Until Apple catches up, iPhone X users will achieve their best speeds on T-Mobile and Verizon Wireless, in part because Verizon uses more wideband, contiguous Frequency Division Duplex (FDD) LTE spectrum than any other carrier, which will allow iPhone users to benefit from the enhanced bandwidth while connected to just two frequency blocks. The worst performing network for iPhone X users belongs to Sprint, followed by AT&T.

 

Rural vs. Urban

For customers in the top-100 cities in the United States, T-Mobile and Verizon Wireless were generally the best choices, with some interesting exceptions. AT&T and Verizon Wireless generally performed best in areas where the companies also offer landline service, presumably because they are able to take advantage of existing company owned infrastructure and fiber networks. Verizon Wireless performed especially well in 13 states in the northeast, the upper midwest (where it acquired other cellular providers several years ago), Alaska, and Hawaii. AT&T was fastest in four states, especially the Carolinas where it has offered landline service for decades, as well as Nebraska and Nevada. Sprint outperformed all the rest in Colorado, while T-Mobile’s investments helped make it the fastest carrier in 31 states, notably in the southeast, southwest, and west coast cities.

The story rapidly changes in rural areas, however. Almost uniformly, speeds are considerably slower in rural areas where coverage and backhaul connectivity problems can drag down speeds dramatically. In these areas, how much your wireless provider is willing to spend makes all the difference. As a result, T-Mobile’s speed advantage in urban areas is dramatically reduced to near-equivalence with Verizon Wireless in rural communities, closely followed by AT&T. Sprint continues to lag behind in fourth place. No speed test result means a thing if you have no coverage at all, so rural customers need to carefully consider the impact of changing carriers. Always consider a 10-14 day trial run of a new provider and take the phone to places you will use it the most to make sure coverage is robust and reliable. Sprint and T-Mobile’s roaming agreements can help, but in areas with marginal reception, the two smaller carriers still favor their own networks, even if service is spotty.

MSA-Metropolitan Service Area; RSA-Rural Service Area

Network Upgrades and the Future

In the short term, most wireless upgrades will continue to enhance existing 4G LTE service and capacity. True 5G service, capable of speeds of a gigabit or more, is several years away for most Americans.

T-Mobile

T-Mobile has invested in thousands of new cell sites in over 900 cities and towns to quash its reputation of being good in cities but poor in the countryside. Many, but not all of these cell sites are in exurban areas never reached by T-Mobile before. The company is also deploying its 600 MHz spectrum, which performs well indoors and has a longer reach than its higher frequency spectrum, which will go a long way to end annoying service drops in marginal reception areas. These upgrades should make T-Mobile’s service stronger and more reliable in suburbs and towns adjacent to major roadways. But service may remain spotty to non-existent in rural states like West Virginia. Most of T-Mobile’s spectrum is now dedicated to 4G LTE service, with just 10 MHz reserved for 3G legacy users. T-Mobile has set aside only the tiny guard bands for LTE and UMTS service for legacy GSM channels handling some voice calls and 2G services.

T-Mobile is also introducing customers to Carrier Aggregation through Licensed Assisted Access (LAA). This new technology combines T-Mobile’s current wireless spectrum with large swaths of unlicensed spectrum in the 5 GHz band. Because the more bandwidth a carrier has, the faster the speeds a carrier can achieve, this upgrade can offer real world speeds approaching 600 Mbps in some areas, especially in urban locations.

Verizon Wireless

Verizon Wireless is suffering a capacity shortage in some areas, causing speeds to drop during peak usage times at congested towers. Verizon’s solution has been to add new cell sites in these mostly urban areas to divide up the traffic load. In many markets, Verizon has also converted most or all of its mid-band spectrum to LTE service, compacting its legacy CDMA network into a small section of the 850 MHz band. With 90% of its traffic now on LTE networks, this week Verizon confirmed it will stop activating new 3G-only devices and phones on its network, as it prepares to end legacy CDMA and 3G service at the end of 2019. Once decommissioned, the frequencies will be repurposed for additional LTE service.

In the immediate future, expect Verizon to continue activating advanced LTE features like 256 QAM, which enables customers’ devices and the network to exchange data in larger amounts and at faster speeds, and 4×4 MIMO, which uses an increased number of antennas at the cell tower and on customers’ devices to minimize interference when transmitting data. How fast this technology arrives at each cell site depends on the type of equipment already in place. At towers powered by Ericsson technology, a minor hardware upgrade will quickly enable these features. But where older legacy Alcatel-Lucent equipment is still in use, Verizon must first install newer Nokia Networks equipment to introduce these features. That upgrade program has moved slower than anticipated.

Older phones usually cannot take advantage of advanced LTE upgrades so Verizon, like other carriers, may have to convince customers it is time to buy a new phone to make the most efficient use of its upgraded network.

AT&T

AT&T customers are also dealing with capacity issues in some busy markets. AT&T has a lot of spectrum, but not all of it is ideal for indoor coverage or rural areas. The company, like Verizon, is trying to deal with its congestion issues by deploying new technologies in traffic-heavy metropolitan markets. AT&T is using unlicensed spectrum in parts of seven cities, accessible to customers using the latest generation devices, to increase speeds and free up capacity for those with older phones. For most customers, however, the most noticeable capacity upgrade is likely to come from AT&T’s nationwide public safety network. This taxpayer-supported LTE network will be reserved for first responders during emergencies or disasters, but the rest of the time other AT&T customers will be free to use this network with lower priority access. This will go a long way towards easing network congestion, and customers will get access automatically as available.

At the same time, AT&T, like Verizon, is trying to deploy additional advanced LTE features, but has been delayed as it mothballs older Alcatel-Lucent equipment at older cell sites, replaced with current generation Nokia equipment.

Sprint

Sprint has done the most in 2017-2018 to improve its wireless network, especially its traditionally anemic download speeds. While still the slowest among all four national carriers, things have gotten noticeably better for many Sprint customers in the last six months. Sprint recently activated LTE on 40-60 MHz of its long-held 2.5 GHz spectrum, which has improved network capacity. Carrier Aggregation has also been switched on in several markets.

Unfortunately, Sprint’s 2.5 GHz spectrum isn’t the best performer indoors, and the company has also had to adjust frame configuration in this band. Sprint is the only Time Division Duplex (TDD) LTE carrier in the country. This technology allows Sprint to adjust the ratio of download and upload capacity by dedicating different amounts of bandwidth to one or the other. Sprint tried to address its woeful download speeds by devoting 30% more of its capacity to downloads. But this also resulted in a significant drop in upload speeds, which are already anemic. Sprint has been able to further tweak its network in some areas to boost upload speeds up to 50%, assuming customers have good signals, to mitigate this issue.

Sprint is also restrained by very limited cell site density and less lower frequency spectrum than other carriers. That means more customers are likely to share a Sprint cell tower in an area than other carriers, and the distance between those towers is often greater, which can cause more instances of poor signal problems and marginal reception than other carriers. Sprint’s best solution to these problems is a merger with T-Mobile, which would allow Sprint to contribute its 2.5 GHz spectrum with T-Mobile’s more robust, lower frequency spectrum and greater number of cell sites, instead of investing further to bolster its network of cell sites.

Verizon, AT&T, Sprint, and T-Mobile Have Been Selling Your Location to Just About Anyone

Go ahead, enjoy a free trial and locate (within 100 yards) your ex-boyfriend or girlfriend, husband, wife, or friends. This online demo had few security checks to keep unauthorized users out, despite claims consent was required. (Image courtesy of: Krebs on Security)

A company best known for providing phone service to prisoners and monitoring inmate locations has sold access to the whereabouts of almost every powered-on cellphone in the country without verifying a court order, thanks to a lucrative partnership with America’s top four cell phone companies.

The service, provided by Securus, has proved a handy tool for law enforcement agencies nationwide, allowing one former sheriff of Mississippi County, Mo., to track the whereabouts of a judge and members of the State Highway Patrol, all without their consent.

The New York Times reported in May that despite repeated assurances from cell phone companies that location data sold to third parties would not include personally identifiable information, it now appears in fact, it often does, and not just information about a particular company’s own customers.

Securus’ location service has been available since at least 2013, although some claim the service has been active for much longer than that, and after recent attention from Congress, Verizon, AT&T, and Sprint have announced they will suspend the sale of location data to most third parties as soon as contract termination notices can be sent.

The industry’s commitments to customer privacy appear to be tissue thin, based on the confidential contracts companies like Verizon and AT&T sign with third-party data aggregators, who in turn resell each provider’s location service to an even broader range of companies. Sen. Ron Wyden (D-Ore.) called the contracts “the legal equivalent of a pinky promise” in a letter sent to the Federal Communications Commission.

Verizon, T-Mobile, AT&T, and Sprint all have contracts with two of the country’s largest resellers of location data – LocationSmart and Zumigo. The contracts allow the two firms to pull cellphone users’ locations in real time and sell that information to other companies, including Securus. The contracts claim to need users’ consent before their location information can be revealed, which is either done in an app directly requesting location data or in a thicket of fine print terms and conditions most consumers never read. There is scant evidence cell phone companies independently audit consent records, which means a company or app author could claim blanket consent.

Securus never had a contact with many of the people it tracked — often those suspected of a crime or law enforcement officers. Securus operates its service under provisions permitting law enforcement to access location data without the consent of those being tracked, as long as the law enforcement agency attests to the legality of its request. Laws requiring court orders to track cellphone users vary considerably in different states. Some require a judge’s signature on a court order, others demand a notarized statement from a law enforcement official, while others require no independent review at all.

Cell phone companies may have a loophole to escape legal culpability for revealing private personal location information to unauthorized third parties. Privacy laws have never offered strong privacy protections to consumers for telecommunications services. In March 2017, the Republican majority in Congress stripped what privacy protections did exist during the Obama Administration in a mostly party-line vote condemned by Democrats. After the rules were repealed, mobile providers can track and share people’s browsing and app activity without permission. Several Democrats warned the move would lead to an eventual scandal when providers were caught collecting and selling sensitive personal information without customer consent.

As long as they are following their own voluntary privacy policies, carriers “are largely free to do what they want with the information they obtain, including location information, as long as it’s unrelated to a phone call,” Albert Gidari, the consulting director of privacy at the Stanford Center for Internet and Society and a former technology and telecommunications lawyer told the New York Times. If a cellphone is powered on, constantly updated location information accurate within a few hundred feet is available for sale.

Because cell phone companies work with third-party aggregators, they can claim any privacy violations could be the result of unauthorized or inappropriate use of their location tools. But finding which company ultimately violated a consumers’ privacy requires investigative work because services like LocationSmart also sell services to other aggregators, who in turn sell services to a myriad of companies. That is what appears to have happened with Securus, who accessed location services through a mobile marketing company called 3Cinteractive, which in turn has a contract with LocationSmart. That means a provider can claim at least three layers of possible third-party liability, because requests moved through several hands:

Example: Law enforcement agency request -> Securus -> 3Cinteractive -> LocationSmart -> Verizon

Although law enforcement agencies are supposed to upload legal documents proving informed consent laws do not apply to a particular request, it appears the validity of those documents was not independently verified.

“Securus is neither a judge nor a district attorney, and the responsibility of ensuring the legal adequacy of supporting documentation lies with our law enforcement customers and their counsel,” a Securus spokesman said in a statement. Securus offers services only to law enforcement and corrections facilities, and not all officials at a given location have access to the system, the spokesman added.

But those that did could abuse the system with few consequences. In fact, a security hole left open for a year by LocationSmart appears to have let almost anyone use the service to find friends, family, or anyone else, thanks to a helpful free demo for prospective clients revealed by Robert Xiao, a security researcher at Carnegie Mellon University:

LocationSmart’s demo is a free service (Editor’s Note: the demo has since been locked down) that allows anyone to see the approximate location of their own mobile phone, just by entering their name, email address and phone number into a form on the site. LocationSmart then texts the phone number supplied by the user and requests permission to ping that device’s nearest cellular network tower.

Once that consent is obtained, LocationSmart texts the subscriber their approximate longitude and latitude, plotting the coordinates on a Google Street View map. [It also potentially collects and stores a great deal of technical data about your mobile device. For example, according to their privacy policy that information “may include, but is not limited to, device latitude/longitude, accuracy, heading, speed, and altitude, cell tower, Wi-Fi access point, or IP address information”].

But according to Xiao, a PhD candidate at CMU’s Human-Computer Interaction Institute, this same service failed to perform basic checks to prevent anonymous and unauthorized queries. Translation: Anyone with a modicum of knowledge about how Web sites work could abuse the LocationSmart demo site to figure out how to conduct mobile number location lookups at will, all without ever having to supply a password or other credentials.

“I stumbled upon this almost by accident, and it wasn’t terribly hard to do,” Xiao said. “This is something anyone could discover with minimal effort. And the gist of it is I can track most peoples’ cell phone without their consent.”

Obtaining customer consent to share location details appears to not always be a priority of the location data resellers. For them, a lucrative business depends on easy access to location information that can be sold for targeted marketing campaigns (such as texting a coupon offer when entering a store or sending a special offer if you appear to be visiting a competitor’s store), tracking packages, service calls, or deliveries (such as tracking the cable repair technician, the location of your pizza, or where the parcel service driver is with a package you ordered), or allowing your bank to flag a suspicious credit card transaction when they discover your cellphone is nowhere near the store where the purchase just occurred.

Wyden

The personal risks of unauthorized access are too numerous to count, starting with former boyfriends or girlfriends cyberstalking one’s live location, criminals tracking a target, and law enforcement officials violating your rights.

The revelations in the New York Times, published on May 10, have attracted the sudden attention from America’s largest cell phone companies this week because of Sen. Wyden’s letter informing them they are under scrutiny. No cell phone company wants to endure the media spotlight Facebook has been under since revelations it exposed the personal data of as many as 87 million users without their consent. The carriers, except for T-Mobile, have announced a lock-down.

Verizon: Verizon Communications pledged to stop selling individual customer locations to data brokers, and will wind down contracts with LocationSmart and Zumigo, a competing data aggregator. “We will not enter into new location aggregation arrangements unless and until we are comfortable that we can adequately protect our customers’ location data,” Verizon privacy chief Karen Zacharia wrote in a June 15 letter to Wyden. Verizon did not explain why it took at least two years for the lock-down to begin.

AT&T: Said it “will be ending our work with aggregators for these services as soon as practical in a way that preserves important, potential lifesaving services like emergency roadside assistance.”

Sprint: “Suspended all services with LocationSmart” last month and “is beginning the process of terminating its current contracts with data aggregators to whom we provide location data.” A spokeswoman said that effort “will take some time in order to unwind services to consumers, such as roadside assistance and fraud prevention services.”

T-Mobile: Stopped short of terminating agreements, T-Mobile executives told Wyden it “started one of our periodic reviews several months ago and selected a third-party to assess this program.”

Securus: Securus spokesman Mark Southland said in a statement that the company adheres to its contract, adding that cutting off law enforcement access to location tools “will hurt public safety and put Americans at risk.”

Read the full letters from America’s top-four mobile companies:

Sprint Offering $15/Mo Unlimited Call/Text/Data Plan to New Customers… Until Friday

Sprint debuted its new $15/month Unlimited Kickstart plan on June 7th, and will stop taking new orders for it tomorrow evening, making it one of Sprint’s shortest-lived plans ever.

The plan, intended to steal customers from competitors, offers those bringing a qualified device (or buying one) the opportunity of paying just $15 a month for unlimited talk, texting, and data, with some caveats:

  • Video streams are throttled to support up to 480p, music streams are limited to 500 kbps, and gaming streams don’t exceed 2 Mbps.
  • Customers on this plan are subject to speed throttles, known at Sprint as “data deprioritization” when towers are congested, regardless of usage.
  • Customers must enroll and maintain autopay.
  • Requires customers to sign up for a new line, port an existing number, and either bring your own device or buy one from Sprint.

Unlimited Kickstart gives Sprint a chance to report a big boost in new customer signups during its next quarterly report to Wall Street. But the company claims the plan also allows customers of other carriers the opportunity of sampling Sprint’s upgraded network, or return to Sprint as an ex-customer to see how the network has improved. There are no contracts, and the offer also extends to other family members — each line up to four will cost just $15/month.

Sprint will attempt to upsell customers to its Unlimited Freedom plan, which offers more features at a higher price.

“At Sprint, we’ve worked incredibly hard to improve our network,” the company claimed in a press release. “In fact, Sprint’s national average download speed increased 34.5 percent year-over-year, more than any other national carrier. Plus, we’ve increased our investment to make our coverage, reliability and speed even better as Sprint prepares to launch the first mobile 5G network in the U.S. in the first half of 2019.”

The company claims interest in the offer is extremely heavy, but the press release announcing it also mentioned an expiration date for enrollees of Friday night (June 15) at 11:59pm EDT, which means time is running out. Customers have to sign up for the offer online, which isn’t particularly intuitive. A Live Chat button is located on the web page which may offer some help to those trying to enroll. If you own a qualified phone already, or acquire a new one, you will need to acquire a Sprint SIM card to activate the plan no later than June 22, 2018.

T-Mobile/Sprint Merger Promises Fake 5G Initially; Only Slightly Better Than 4G LTE

The head of T-Mobile USA claims a merged T-Mobile and Sprint will be the best positioned to quickly deliver 5G wireless service to Americans, despite claims from industry insiders Legere’s claim is little more than vaporware.

“Only the new T-Mobile will have the network and spectrum capacity to quickly create a broad and deep 5G network in the first few years of the 5G innovation cycle, the years that will determine if American firms lead or follow in the 5G digital economy,” T-Mobile CEO John Legere claimed during the April 29th merger announcement.

But the 5G network Legere is referring to is little better than T-Mobile’s existing 4G LTE network, and won’t be capable of delivering gigabit speeds or an in-home broadband replacement.

Broadband expert Dave Burstein characterizes T-Mobile’s audacious 5G claims as part of a campaign to “bamboozle D.C.” to win merger approval.

It turns out T-Mobile is not talking about the same 5G technology under development at AT&T and Verizon, which both use millimeter wave networks and small cell antennas.

T-Mobile’s version of 5G is a already appearing elsewhere around the world — a new definition incremental upgrade for 4G LTE, “70-90 percent slower than the good stuff — millimeter wave,” claims Burstein.

“Folks building LTE-speed networks wanted to be called ‘5G’ and take advantage of the massive hype,” Burstein wrote. “So they made ‘New Definition 5G’ with a PR campaign and a minor software tweak, dubbed ‘NR’ for New Radio. 4G LTE networks [suddenly] became ‘5G.’ Every engineer in the business knows this is a scam.”

T-Mobile’s version of ‘5G’ is likely to appear on its spectrum in the 600 MHz range, easily deployed from existing cell towers and relatively cheap and easy to launch. It won’t deliver anything close to the speed or capacity improvements being claimed by Legere and a few others in the industry.

“Legere is swearing to Washington the T-Mobile 640 MHz 5G NR network will be many times faster than LTE,” Burstein said. “That isn’t true, of course. It’s far more likely to be only 25%-50% faster, or perhaps less. It may even be slower than the 500 MHz LTE/LAA T-Mobile already has in Manhattan.”

China claims to be ahead of the United States — another issue being pushed by T-Mobile merger supporters to “regain” America’s “lead” on 5G — by deploying its own version of 5G similar to the ‘new definition’ version of 5G Burstein talks about. The Trump Administration has even contemplated nationalizing America’s 5G network infrastructure to share benefits among all leading wireless carriers, if only to speed deployment and generate new demand for network equipment produced in the United States — not China.

But a closer look at China Mobile’s version of 5G finds the company installing approximately two million “mid-band” 5G cellular antennas that will work at 3.7 GHz. It isn’t the millimeter wave 5G technology contemplated by AT&T and Verizon, and won’t deliver much faster speeds than China Mobile’s existing 4G LTE infrastructure. Instead, it will help China Mobile better manage its bandwidth demand with a network at least twice as large as that of AT&T or Verizon.

Critics of ‘new definition 5G’ call the technology “evolutionary, not revolutionary.”

What makes millimeter wave 5G technology superior is the wide swath of dedicated spectrum typically available for wireless broadband. Some companies will have 400 to 800 MHz of frequencies available to support millimeter wave 5G, while the maximum spectrum for LTE is around 100 MHz. That extra millimeter wave spectrum has delivered up to 20 Gbps speeds in the lab, and Verizon is contemplating selling gigabit speed service to its fixed wireless customers using the technology sometime this year.

Despite Legere’s boastful claims, Burstein warns politicians and regulators they need to learn that T-Mobile’s type of “5G” is no longer “a big thing in most cases.” Even seasoned regulators like Jessica Rosenworcel and Ajit Pai at the FCC have incorrectly confused new definition 5G with millimeter wave 5G. Others, including Andrus Ansip at the EU and several Chinese leaders, have made similar mistakes as part of boastful claims about future network performance.

Burstein says it is a case of not listening to network engineers, who know the difference.

“They have engineers at the FCC,” Burstein said. “If they listen to the engineers, they will know the [merger] deal is not in the public interest.”

Strong Evidence T-Mobile/Sprint Merger Will Cause Prices to Rise, Innovation to Sink

Despite rosy predictions from Sprint and T-Mobile executives that the two companies joining forces will result in plentiful competition, lower prices, and more advanced service, the results of prior mergers in the wireless industry over the last 20 years delivered increasing prices, reduced innovation, and a lower customer service experience instead.

Few markets show the stark results of consolidation more than the telecom industry. Monopoly cable rates, barely competitive wireless domination by AT&T and Verizon — both with a long history of adjusting wireless rates and plans to closely match one another (usually to the detriment of the consumer), and politicians and regulators that acquiesce to the wishes of the telecom industry have been around even before Stop the Cap! got started in 2008.

When a market disruptor begins to challenge predictable and stable marketplaces, Wall Street and investors quickly get uncomfortable. So do company executives, whose compensation packages are often dependent on their ability to keep the company’s stock price rising. That is why T-Mobile USA’s “Uncarrier” campaign, which directly challenged long-established wireless industry practices, created considerable irritation for other wireless companies, especially AT&T and Verizon.

The two wireless industry giants initially ignored T-Mobile, suggesting CEO John Legere’s noisy and confrontational PR campaign had no material impact on AT&T and Verizon’s subscriber base and revenue. Ironically, Legere was named CEO one year after AT&T’s 2011 failed attempt to further consolidate the wireless industry with its acquisition of T-Mobile. A very generous deal breakup fee and accompanying wireless spectrum provided by AT&T after the deal collapsed gave T-Mobile some room to navigate and transform the company’s position — long the nation’s fourth largest national wireless carrier behind Sprint. It is now in third place, poaching customers from the other three, and has repeatedly forced other carriers to change their plans and pricing in response.

T-Mobile’s “Uncarrier” promotion.

T-Mobile invested in its network and delivered upgrades, but the real inroads for subscriber growth were made by throwing out the typical wireless carrier business plan. T-Mobile brought back unlimited data and made it a key feature of their wireless plans starting in 2016, a feature AT&T and Verizon had successfully banished, ended the traditional two-year contract, scrapped junk fees and surcharges that customers hated, and ran regular specials that dramatically cut family plan rates. If you lived in an area with solid T-Mobile coverage, the scrappy carrier quickly became a viable option among those contemplating ditching Verizon or AT&T. T-Mobile also benefited enormously from disaffected Sprint subscribers that spent years riding out frequent promises of an in improved network experience that frankly never matched the hype in many areas. Price conscious customers that could not afford a plan with AT&T or Verizon moved even more readily to T-Mobile’s network.

In contrast, AT&T and Verizon have spent the last 20 years consolidating the wireless industry by acquiring regional carriers that had a reputation for good service at a fair price, with the promise that the acquisition by a richer and larger competitor would accelerate network upgrades and improve service. But customers of long-gone or diminished carriers like Alltel, Leap Wireless’ Cricket, MetroPCS, and Centennial Wireless (there are others) that either no longer exist or remain alive only as a brand name on a larger company’s network, noticed higher bills and eliminated coveted features that helped them manage their data and voice plans and costs.

In Europe, recent industry consolidation in some countries has reduced major carriers from four to three, similar to what T-Mobile and Sprint would do in the United States. Pal Zarandy at Rewheel compared consolidated markets in Germany and Austria and discovered gigabyte data pricing where consumers had three options almost doubled in price in Germany and Austria. Austria was 30% less expensive than a control group of six neutral countries when it had three competitors. Today, with two, it is 74% more expensive than its European counterparts. In Germany, prices went from 60% more expensive to nearly triple the rates charged by control group countries.

The merger of Sprint and T-Mobile will dramatically reduce competition in several ways:

  1. It will end the pervasive price war for lower-income consumers on postpaid plans. Sprint and T-Mobile directly compete with each other to secure customers that skip AT&T and Verizon Wireless because of their more expensive plans and accompanying higher-standard credit check.
  2. Each of the four current national carriers have had to respond to aggressive price promotions for hardware (Sprint, T-Mobile), plans (T-Mobile, Sprint), and loyalty-building rewards (T-Mobile Tuesday). With a merger, those promotions can be scaled back.
  3. AT&T and Verizon have been forced to reintroduce unlimited data plans as a direct result of competition from Sprint and T-Mobile. Incidentally, Sprint and T-Mobile’s unlimited data features are different. T-Mobile offers zero rating of lower-resolution videos from selected websites while Sprint offers unlimited access to HD video. In fact, Sprint’s unlimited plan marketing campaign casts T-Mobile’s version in a negative light and was designed to beat T-Mobile’s plan to attract new customers.
  4. Since Sprint and T-Mobile are market disruptors, merging them means no new aggressive campaigns to out-disrupt each other to the consumer’s benefit. Instead, they will target the conservative plans of AT&T and Verizon, which requires less innovative marketing and less significant price cuts.

Sprint’s marketing points to differences between its plans and those from T-Mobile, Verizon, and AT&T.

In 2015, the OECD released a definitive study demonstrating the impact of consolidating telecom mergers among top industrialized countries, including the United States. The results were indisputable. If you reduce the number of national carriers to fewer than four, prices rise, service deteriorates — along with innovation and investment, and consumers are harmed. In Canada, where three national carriers dominate, the former Conservative government made finding a fourth national wireless competitor a national policy priority. While Americans gripe about their cell phone bills, many Canadians are envious because they often pay more and live with more restricted, less innovative plans.

This February, market research firm PwC published its own findings, “Commoditization in the wireless telecom industry,” showing that North America remained the most “comfortable” region in the world for wireless carriers looking for big revenue and profits, but that was starting to change because of disruptive marketplace changes by companies like T-Mobile and Sprint.

“In this zone, there is a greater than 50 percent spread in market share and ARPU between highest and lowest market players indicating that commoditization is far off,” PwC notes. For wireless carriers, “commoditization” is bad news. It means the amount of money a carrier can charge for its services is highly constrained because multiple competitors are ready to undercut another carrier’s prices or engage in all-out vicious price wars. In these areas, commoditization also means consumers treat each competitor as a viable player for their business.

In France, four national providers —  OrangeSFRBouygues Telecom and Free, have been in a price war for years, keeping France’s wireless prices shockingly low in comparison to North America. The price war in the United States is just beginning. PwC notes as the U.S. market becomes saturated — meaning everyone who wants a cellphone already has one — companies will have to compete more on price and service. T-Mobile and Sprint have been the most aggressive, and the effect is “meaningful competition.” In Canada, where three national carriers exist, competition is constrained by the domination of three large national companies and some regional players. Instead of cutting prices and expanding plan features, many Canadian providers are now trying to bundle their cable, phone, and wireless customers into a single package to “protect [market] share and increase stickiness.” In other words, Canadian wireless carriers are designing plans to hold the line on pricing while keeping customers loyal at the same time.

While average revenue per customer is now around $30 a month in North America, it is less than half that amount in virtually every other region in the world. PwC shows the direct impact of competition starting around 2014, when T-Mobile and Sprint got particularly aggressive about pricing. Wireless carrier ARPU was no longer a nearly flat line from 2009-2013. Now it is dropping faster than every other region in the world as AT&T and Verizon have to change their pricing to respond to competition pressures.

Sprint and T-Mobile’s CEOs launch their PR blitz. (Image: Cheddar)

While reports are likely to surface arguing the alleged pro-consumer benefits of the Sprint/T-Mobile merger, it will be critical to determine who or what entities funded that research. We expect a full-scale PR campaign to sell this merger, using industry-funded astroturf groups, industry-sponsored research, and industry-connected analysis and cheerleading.

In 2011, the Justice Department definitively crushed the proposed merger of AT&T and T-Mobile. It cited strong and convincing evidence that removing a competitor from the wireless market will lead to consumer harm from reduced competition and higher prices. If one substitutes Sprint for AT&T, the evidence still shows Sprint’s own aggressive marketing and promotions (and its competitors’ willingness to match or beat them) will be missing from a marketplace where Sprint no longer exists. That cannot and should not be allowed to happen.

Search This Site:

Contributions:

Recent Comments:

  • LC Fults Jr: Not true I had a run in with Livewave I never went thru with the purchase but it show up on my PayPal account anyway I file a complaint with PayPal in...
  • LC Fults Jr: I have did the same thing with the Livewave spend 48 dollars for nothing got zero channels also and they will not answer any email for a return so wha...
  • Tube: Was watching CMax and Epix yesterday and today it says I no longer sub to them! For an additional 15 bucks a month I can get them back. For what? So ...
  • Rossa Williams: I moved over and they qualify for early buyout off under $500 I've called twice I've got no respond they say they was going to send me something in th...
  • snake: I had the original $20 a month service for years. Then last week they shutdown my internet, before my bill was due. I paid the amount. Service was sti...
  • JayS: Are the streaming services that carry local channels (Sling, DirectTv Now, YouTubeTv....) paying the same/similar remuneration to the local stations a...
  • Nicole: Would be fine if spectrum actually worked all the time. It's the worst....
  • jeff k: So glad I looked at reviews FIRST! I was 5 minutes away from buying the 3 for $73.75 deal. WOW, I started the day calling COX to find out how much it ...
  • Adam: Figured I’d take a deeper look into my bill. Each month it kept slowly creeping up! My bill increased $20 more since last year! I’m stuck with their m...
  • Divine Retribution: I've had Fios since 2006 when it was originally owned by Verizon & much better then mind you & I can tell you their internet speed isn't even ...
  • Mark: I ordered LiveWave yesterday and used PayPal/AMEX. I read through theses comments and decided to cancel my order. I called the number listed on my ord...
  • fordoughnow: My Internet started at $40 less than 2 years ago with Spectrum. $68 now with all the taxes and service BS. I haven't had a raise in that time so I'm n...

Your Account: