The merger of T-Mobile and Sprint should spur a new cycle of innovation and job creation in the Puget Sound region.
The blockbuster merger between T-Mobile US and Sprint should bring tremendous benefits to the Puget Sound region and deserves strong support.
Bellevue, where T-Mobile now employs around 5,500 people, will be the primary headquarters of the combined companies, they announced Sunday.
That decision sends a strong message that, despite growth challenges and Amazon’s wandering eye, the greater Puget Sound region remains an outstanding place to build and grow world-class, cutting-edge companies.
It’s also a reminder of the region’s historic role in creating the wireless industry. Local entrepreneurs started companies that became AT&T Wireless and T-Mobile, two of the nation’s three largest wireless companies.
Looking forward, the merger positions T-Mobile to be a contender in the next wave of wireless innovation. The company plans to invest $40 billion over three years as it races to lead deployment of 5G, or fifth-generation, network technology.
Some jobs will be lost as overlapping positions are eliminated. It’s unclear how many jobs will be affected in Bellevue and at Sprint’s headquarters near Kansas City.
Bellevue should fare better, though, according to industry analyst Chetan Sharma, because T-Mobile will retain operating power of the company.
Greater benefits should come longer term, assuming the merger is approved by regulators, T-Mobile succeeds and the region continues supporting innovative, job-creating companies. The latter should be a priority for regional and state officials, to counter negative sentiment emanating from Seattle politicians.
T-Mobile’s 5G investments on the combined spectrum from Sprint should spur a new cycle of job creation. Sharma said T-Mobile may acquire complementary startups as it proceeds, and may also spin off new ventures.
Because the merger gives T-Mobile scale comparable to AT&T and Verizon, and a stronger enterprise business, the Bellevue company may attract new industry alliances in sectors such as connected transportation, Sharma said.
Other companies in the wireless ecosystem will have more incentive to locate offices near T-Mobile as they partner with the company and draw on its cluster of 5G expertise.
Things could have gone the other way. In 2014 Sprint was the larger company trying to acquire T-Mobile. At the time Sprint was shuttering another Bellevue company it acquired, Clearwire, which previously had 1,700 employees.
Then the team in Bellevue out-innovated Sprint. It rapidly boosted its 4G network and upended the industry with bold marketing and pricing strategies. T-Mobile became the acquirer.
A merger was inevitable. Both companies need more scale to compete with Verizon and AT&T and with cable companies they will challenge with 5G broadband.
State and regional policymakers should support this merger as the best possible outcome. It will advance the region’s technology leadership and should create more jobs and opportunity.