According to a new report from research firm Strategy Analytics, the $26bn merger set to take place between T-Mobile and Sprint is expected to increase the number of 5G subscribers by 17% by 2023.
The report expects that one of the key outcomes of the merger for the industry will be a greater deployment, investment and adoption of 5G across the US, with the firms pledging to invest $40bn in a new 5G network.
“The new T-Mobile even as a strong number two player more on par with Verizon and AT&T will remain disruptive and go after growth with its market-leading 5G smartphone positioning using low and mid-band spectrum,” said Susan Welsh de Grimaldo, Director at Strategy Analytics.
“With the merger, the new company would be better positioned for a convergence play, growth in automotive and other high mobility/ broad coverage 5G use cases, with new strength in wholesale and enterprise and positioning for Network-as-a-Service (NaaS) with 5G network slicing.”
As a result of the synergies of the merger, the report forecasts that the combined entity will outperform the firms’ individual operations by 1% in market share of gross additions, 0.5% in the subscriptions market share, and 0.4% in revenue market share.
Strategy Analytics also expects that early 5G smartphones will cost around $1,000, something that may stump the market in its initial stages.
“T-Mobile and Sprint may need to subsidize the first wave of 5G smartphones if they want to bring down retail prices to realistic levels that early mass-adopters are willing to pay,” said Ken Hyers, Director of Emerging Device Technologies, Strategy Analytics.