Cable faces powerful new 5G competitor with combined Sprint and T-Mobile

T-Mobile CEO John Legere (T-Mobile)
T-Mobile CEO John Legere. (T-Mobile)

Already dealing with skittish investors worried about the ability of MSOs to compete with the mounting 5G forces of Verizon—among several other things—cable operators got a brand-new thing to worry about over the weekend when T-Mobile and Sprint announced their $26 billion merger.

Of course, it’s not really new—the two companies had been in a protracted M&A dance for years. But now that it’s actually happening, Comcast, Charter and other U.S. cable operators face the very real threat of another powerful wireless carrier spending billions to develop a low-latency, gigabit-capable wireless replacement for wireline broadband. 

Sprint and T-Mobile said the newly combined company will invest up to $40 billion toward its new network and business in its first three years of operation, which the companies said represents 46% more spending than T-Mobile and Sprint spent combined in the past three years. Sprint and T-Mobile said the combined company, dubbed "New T-Mobile," will deploy 5G nationwide across spectrum including T-Mobile’s 600 MHz spectrum and Sprint’s 2.5 GHz spectrum

“Compared to T-Mobile’s network today, the combined company’s network is expected to deliver 15x faster speeds on average nationwide by 2024, with many customers experiencing up to 100x faster speeds than early 4G,” the companies said in a release announcing the merger.

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Last week, during Comcast’s first quarter earnings call, Comcast Cable CEO Dave Watson took a “we’ll see what happens” position when asked if his company is concerned about 5G competition from wireless companies.

“Our focus, whether it's Verizon or whoever, is to continue to build out our network,” Watson said, according to a transcript provided by Seeking Alpha. “We’re very focused around broadband. We are going to test opportunities with 5G. But we are not going to stand still. We are going to continue to enhance our network capabilities.”

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As for New T-Mobile, it would be led by T-Mobile’s current CEO John Legere. The company will be headquartered in T-Mobile’s home base of Bellevue, Washington. The companies said they will host a “second headquarters” in Sprint’s home base of Overland Park, Kansas.