Sprint merger stalling T-Mobile's 5G rollout, says Wells Fargo

Sprint / T-Mobile logos
(Image credit: Sprint / T-Mobile)

T-Mobile 5G build-out has been put on hold while it waits for the final approval about its $26.2bn (£21.2) merger with Sprint. T-Mobile hasn’t admitted that it’s slowing down deployment of its 5G cell sites, but according to Wells Fargo, the research and financial services company, that's exactly what's happening.

“Hasn’t and won’t change” 

Whilst T-Mobile is allegedly slowing down it’s 5G roll-out, it’s also slowing down payments to contractors. This worrying development was also reported by Wells Fargo. Invoices with a 60-day payment dates are said to be 100 to 120 days late. 

A contractor that spoke to Wells Fargo said that what T-Mobile is doing is a "systematic conservation of capital".

However, T-Mobile has responded to the Wells Fargo report by saying that it still plans on expanding LTE coverage "while simultaneously laying the foundation for broad, nationwide 5G in 2020. That hasn’t and won’t change."

A promising merger 

T-Mobile announced its merger with Sprint in 2018. Sprint won over the FCC by promising 5G coverage targets and agreeing to a price freeze during the first 3-years after the merger closes. However, the Department of Justice needed more to give their approval. 

Sprint has had to sell off all of its pre-paid businesses including Boost Mobile and Virgin Mobile to Dish Network, along with some 800MHz spectrum.

So, what’s keeping the merger from being approved? 

Sprint recently upset the FCC chairman, Ajit Pai. The scandal consisted of Sprint claiming payment for "serving" 885,000 low-income Americans that weren't actually Sprint customers. Chairman Pai commented that, "It’s outrageous that a company would claim millions of taxpayer dollars for doing nothing. This shows a careless disregard for program rules and American taxpayers."

Could the merger still be approved? Only time will tell as T-Mobile halts 5G. 

Fiona Leake

Fiona discovered her love for investing and making money from a young age. Since then this interest has grown and now she loves writing about investing and business, and follows the 5G market closely. She is also a technology enthusiast, and so they tend to be her favourite investments.