Insights & Analyses

Proposed merger between T-Mobile and Sprint could simplify mobile identity innovation

April 30, 2018

T-Mobile and Sprint — the third- and fourth-largest wireless providers in the U.S. — have announced plans to merge, in a move that could have major ramifications for the identity industry.

With nearly 70 percent of the U.S. adult population using a smartphone as of 2017, wireless carriers are uniquely positioned to be the centerpiece of identity verification as the space grows and evolves. But cutthroat competition between the “big four” cellular providers makes collaboration and creation of industry standards a tall order.

Whether or not regulators ultimately approve the proposed T-Mobile and Sprint merger, cutting the space from four companies down to three could make it easier for carriers to establish standards. With one less opportunity for a dissenting opinion, the merger could be seen as a chance to more easily find consensus on mobile authentication.

Together, T-Mobile and Sprint would have some 90 million subscribers, still the third-largest carrier in the U.S., but also within striking distance of the next largest player, AT&T, with 93 million customers. Verizon is America’s largest wireless provider with 116 million customers.

Notably, Verizon, AT&T, T-Mobile and Sprint announced in March of this year that they would collaborate on a new mobile authentication solution for consumers, set to launch by the end of 2018.

But there is reason to believe that infighting among the carriers could sink that authentication deal. Three of the same parties — Verizon, AT&T and T-Mobile — came together in late 2013 to form a mobile payments system to compete with the likes of Apple Pay, but the system required a special SIM card and a prepaid American Express account, and failed to gain traction with consumers.

Despite previous failures in partnership, the alliance shows that the four largest players see mobile phones as the future of authentication and payments.

OWI Take: Mergers, and whether they will ultimately hurt or help consumers, are complicated. While there are valid reasons to be leery of a T-Mobile and Sprint merger, which is precisely why regulators will take a close look at the proposed deal, the partnership could make it simpler for carriers to hammer out a unified identity standard connected to a unique mobile device. This could help pave the way for advances in all aspects of mobile identity, including authentication or verification.