Did you see Sprint's latest financial reports? Here is the Wall Street Journal's May 7 story, "Sprint Reports Steepest Decline of Cellphone Customers in Years," which contains the gory details.
In short, Sprint lost far more postpaid customers than anticipated. As the WSJ lead put it: "Sprint lost 189,000 of its most lucrative phone connections in the first three months of the year, the steepest such decline since at least 2015." The net loss attributable to Sprint was $2.17 billion for the quarter. You can peruse the entire report for more facts and figures.
I'm willing to stipulate, of course, that in an ideal world – or more to the point here, in an ideal market – the existence of more viable competitors is preferable to the existence of fewer viable competitors. I understand that.
But, unlike the proverbial wheat market used to explain supply and demand in an Econ 101 course, the telecommunication marketplace, of which wireless is a segment, is not a textbook teaching ideal. It is a real-world marketplace with a market structure that necessarily is influenced by – if not dictated by – the tremendous investment and financial resources required to build-out and expand ubiquitous network facilities.
So, Sprint's ongoing financial difficulties have real-world financial and marketplace implications. Sprint's chief executive said, in the aftermath of the latest earnings report, that absent approval of the T-Mobile/Sprint merger, Sprint may have to narrow its coverage.
I take no pleasure in the travails of any person – or any company.
Nevertheless, it would be blinking reality for the Department of Justice and the FCC not to take account of Sprint's financial difficulties in the context of considering the T-Mobile/Sprint merger. In initial comments filed in August 2018 in the FCC's proceeding to review the proposed merger, I (along with my Free State Foundation colleague, Seth Cooper) said this: "It appears unlikely that T-Mobile and Sprint separately would have the capital resources necessary to invest in and timely deploy nationwide 5G networks that could compete effectively with AT&T and Verizon."
And in the September 2018 reply comments this: "Sprint’s recent financial history and analysts’ projections reveal that a standalone Sprint would likely be less competitive and perhaps not even viable in the 5G era."
Sprint's financial condition hasn't improved since those FCC comments were filed. Nor have its prospects as a sustainable wireless competitor in the broadband marketplace.
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