Editorials

Is a T-Mobile merger the last best hope for Sprint to survive?

Sprint CEO Marcelo Claure, left, and T-Mobile CEO John Legere on the floor of the New York Stock Exchange Monday.
Sprint CEO Marcelo Claure, left, and T-Mobile CEO John Legere on the floor of the New York Stock Exchange Monday. AP

Sunday’s announcement of a proposed merger between locally-based Sprint and T-Mobile was a bittersweet moment for thousands of Sprint workers and the Kansas City region.

There is real fear about the future of the Sprint campus in Overland Park and roughly 6,000 local Sprint employees.

For good reason: The all-stock merger seems more like a takeover than a true joining of equals. And Sprint is decidedly the junior partner.

T-Mobile officials say they want to maintain a second headquarters here but that jobs can’t be guaranteed. “I don’t know how to say that to each individual in that location,” T-Mobile head John Legere told The Star.

Sprint’s name will likely disappear if the agreement is approved by regulators. That’s worrisome in a region that sorely lacks a nationally-recognized corporate presence.

Yet we can’t oppose the merger out-of-hand. The real truth is this: Any chance for Sprint’s long-term presence in our area, even in a diminished, unnamed capacity, likely requires a merger with a stronger company such as T-Mobile.

Sprint has struggled for decades as a wireless provider and a long-distance company. Competition among telecom providers has been fierce — companies have battled over new technology, quality service and cost.

Sprint has always appeared to be behind in that race. The company’s marketing strategy has often been lacking. Quality, service and billing have been uneven. Customer churn has been robust.

Those problems and others have left Sprint deeply in debt and without the resources to fully exploit new wireless technologies.

T-Mobile faces a similar challenge for different reasons. A combined company may be the only realistic answer.

The importance of the merger does not relieve policy-makers and politicians of their obligation to scrutinize the deal, though. In fact, Washington must work hard to ensure all stakeholders benefit from a Sprint and T-Mobile merger.

That means members of Congress and local officials must protect as many jobs here as possible. They should seek a written commitment from the merged company that workers will be protected for a specific length of time — say, five years after the merger.

The U.S. Justice Department and other regulators must also make sure consumers are protected if the two companies merge.

Already there’s a furious argument about the impact of a merger on competition: Some believe prices will go higher with just three national carriers, while others argue that a strengthened T-Mobile could force costs down across the industry.

We’re not ready to endorse either conclusion. But the onus lies with both companies to convince regulators and the public that a merger will mean better, cheaper wireless services in the years to come.

If the new firm can’t show how it will accomplish those goals, the merger should be rejected.

The Kansas City region won’t suffer irreparable damage if Sprint fades away. The area’s economy is diversified enough that the contraction of a major employer, while problematic, is not a disaster.

The news of the merger is melancholy nonetheless. Sprint, a visible presence in Kansas City for decades, may soon disappear, swallowed by a competitor.

It isn’t the outcome Kansas City, or the company, would have wished.

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