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Justice Department Skeptical About Sprint Acquisition of T-Mobile
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I agree. Deutsche Telekom appears determined to unload T-Mob, and with the adamant opposition of the FCC and the DoJ to allow AT&T to acquire them, and any --however unlikely-- attempt at acquisition by Verizon to suffer the same fate, a Sprint buy-out would arguably, from a consumer point of view at least, be the least odious proposition.
Separately both Sprint and T-Mob are struggling, but together they have increased spectrum, and together they will have increased resources to build out their coverage, and thus they will be able to become a real alternative to AT&T and Verizon. As one entity one would hope they would synchronize both networks to the same standard, and that would more than likely be GSM.
Such a merged new carrier would inject new competitiveness in the mobile arena, as with improved coverage of a merged Sprint/T-Mob, many who currently only stick with the top two providers because of their coverage, would then have three realistic options.
Yeah they can innovate by saying "oh, we don't like Android or Windows Phone .. iPhone and iPad only here!" It's never been done before, so it's innovative!.
Granted I am sure that there are laws in place to try and prohibit things like that, but I wouldn't put it past them considering they refuse to make any app of theirs available on another platform.
It's the Apple way!
Thank you or this insight. I too was wondering why Sprint would go after a company with different technology. Although your statement makes a lot of sense, I do question the tower location comment. I thought the industry trend was not to own the towers (I mean the telcos don't own the towers), but to simply lease space on a tower. Does sprint and or TMobile own significant towers to make this a strategic move? I totally get the idea that if everyone is upgrading to LTE,current compatibility is a short term issue. So from a long term perspective this makes more sense as you describe.
I don't want Sprint to acquire T-Mobile! I had Sprint, then went to AT&T, now I'm with T-Mobile. Almost 8 years after I left Sprint, they called me to tell me I need to pay my bill. Huh? Apparently someone within Sprint stole my identity and used it to open an account in New York City.
Needless to say, they took away any charges and cleared up my credit report, but still refused to remove my personal data from their system. Why do they still have it?!
Amazingly, my co-worker had nearly the exact same issue with Sprint. Someone within Sprint stole his identity too! I don't trust that company at all now.
Needless to say, they took away any charges and cleared up my credit report, but still refused to remove my personal data from their system. Why do they still have it?!
Amazingly, my co-worker had nearly the exact same issue with Sprint. Someone within Sprint stole his identity too! I don't trust that company at all now.
The problem is scale. AT&T and Verison are an order of magnitude bigger than Sprint or Tmobile... Even the two together are no match.
I think the main issue is that Tmobile is the only GSM carrier to AT&T monopoly position... Anything that takes that out if the market is a problem. I doubly Sprint would switch to GSM. So I'd be looking for some "back scratching" going on behond the scenes. Although Sprint needs a "critical mass" of subscribers and if they lose too many, they sink and AT&T + Verison pick their bones for pennies on the dollar.
I was thinking of switching to T-Mobile soon, but after seeing that Sprint is attempting to acquire them I don't want to make the switch. Sprint is unbelievably horrible. Their network is pathetic in my area and I don't want them to harm what T-Mobile is doing to the industry and make all that progress irrelevant. People left Sprint and other carriers to go to T-Mobile for a reason, not get gobbled up by the worst carrier of the bunch.
Time to clear some things up here. First is technically correct but the devil is in the details. Tmobile (44-46mill) plus Sprint (55mill) is pretty much equal to ATT's base.
As pointed out earlier, TMo's parent company wants to ditch them. So yeah, either they go on their own/break up, or get sold to one of the other 3. Now I will explain why I believe the Sprint/TMo is the best option.
Softbank owns Sprint (pretty much). Softbank wants to buy TMo also. Sprint will "technically" take over TMo, but in reality, if you've listened to what execs have been saying and read between the lines this is what is going to happen.
Sprint will get TMo but everything will pretty much shift to TMo. They'd keep the TMo brand, ditch the sprint brand, switch customers to TMo and bring some of sprints management over (maybe) but then just gut Sprint, sell extra equipment, TMo add Sprints backbone, TMo use Sprints spectrum for the lower frequencies along with spectrum just bought from Verizon, sell off unnecessary CDMA either back to the Government who wants to buy back or to Verizon.
At the end of the day, Softbank wants TMo and just wants to add whatever sprint has spectrum wise and infrastructure and then shed the rest. Pretty simple idea and to me, it seems clearly obvious as to what Softbank's motives are.
If building towers are anything like they are in NZ it is pretty much prime real-estate because it is very difficult to get a new mobile tower approved let alone built without having to deal with the backlash of 'mothers who think they're engineers AND doctors' believing their kid will get their brain fried if there is a mobile phone tower close to their house, day care or in fact anywhere they're spending time. So in the the case of owning the tower it gives them a lot more flexibility particularly when adding new capacity or capabilities onto the tower. I wouldn't be surprised if in some places they do share towers but I think that is more out of necessity than something that they want to do if the alternative was easily available.
Back to the point regarding t-mobile - I'd say that is more to do with frequency than anything else; they own quite a number and I could imagine them leveraging them particularly the higher frequencies in built up densely populated areas. Mind you there is also a move towards having a more distributed network with lower power micro-cell sites that avoid having to deal with consent and planning permission particularly the 2.6Ghz band that was recently auctioned off in NZ and given the relationship between the Telco's and Huawei I wouldn't be surprised if we end up seeing a higher frequency 2.6Ghz sitting on LTE-TD in the future.
The explanation by drewyboy is pretty much spot on [link]
I flew on US Airways 2 weeks ago, paid $132 for a flight from Indiana to Phoenix to Burbank. Much better than the $400 flights I was seeing on others.
I wish they would do the same with energy companies. I miss living in NJ that has deregulated laws. Out in the mid-west we get stuck with whatever rate GPE provides.
More like:
#2: We currently have two major and two minor national carriers. If Sprint buys T-Mobile, we'll have two major and one minor national carriers.
(and then worry about all the compatibility issues mentioned by others)
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That's true in a few places here, we've had articles about that in San Fransisco, but not in most places. Lots of space in this larger country.
T-Mobile can be sold to an investment group or company which does not currently operate a major network in the US, similar to how Sprint was sold without reducing competition.
Yeah, yeah, it is the cool thing to hate large corporations among some people nowadays, but what Softbank does in Japan does not affect the competitive environment and the customers in the US any more than a search engine in Brazil or a trucking company in France, so in reality the merger is indeed between two of the smallest nationwide US networks.
I still think it is best to keep the nationwide competition to four or more, so I am against the merger, but how rich the shareholders of each company are does not really matter.
So, let me get this straight. T-Mobile, having just acquired MetroPCS with plans to transition its CDMA network over to GSM is now potentially being bought by Sprint, which is a CDMA provider? That's somewhat confusing and also silly.
Furthermore, does that mean that the national carrier landscape will be AT&T, Verizon, and the conglomerate collective of third party carriers (a.k.a Sprint [which will, at that point, would include T-Mobile, MetroPCS, Boost, Virgin Mobile, Nextel, etc.])? Because that would certainly simplify things, albeit at the cost of inching that much closer to monopolization.
No, it's not the Apple way.
Apple wants to sell iPhones and iPads on every network, not be locked into one (crappy) network only to piss off all the other US wireless companies.
Apple creates apps to sell iPhones, not to sell apps. Even the Windows version of iTunes is designed to sell iPhones.
You're not understanding my comment.
If Apple ran their own network, I would be concerned about them not allowing anything but Apple branded devices on it. I am not talking about it being the only network with Apple devices .. I am talking about a buyout of one of the smaller guys (as was stated) and then Apple turning it into their own elite club.
The problem of Way #2 is that Sprint has the WORST customer service of any of the carriers.
I wouldn't expect them buying T-mobile to fix that, in fact it would probably make it much, much worse.
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U.S. law prevents this from happening, it states that they have to allow unlocked devices on their network, as long as the basic technology is compatible.
Additionally, depending on the carrier, the frequency which are used also had conditions on them when they were purchased that the carrier would have to allow customers to bring their own handsets.
Not only must this be blocked - I'd like to see all of the cell carriers broken up into smaller entities, cable ISPs too.
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There's no contract with T-Mobile. So even if they got purchased and you wanted to leave, there would be no penalty. Soooo glad I ditched ATT. I always hated having them. Glad to be back on T-Mobile.
Or it could be likely that Sprint/T-Mobile will just play "tacit collusion" with AT&T and Verizon. Mirroring their moves instead of actively compete.
It's easier to make money when you don't have to compete, especially now that there are only 3 national carriers.
Tacit collusion occurs where firms undergo actions that are likely to minimise a response from another firm, e.g. avoiding the opportunity to price cut an opposition. Put another way, two firms agree to play a certain strategy without explicitly saying so. Oligopolists usually try not to engage in price cutting, excessive advertising or other forms of competition.
most people would agree that AT&T and Verizon are in tacit collusion right now, the question is, do you want Sprint/T-Mobile (combined) to join in?
would you benefit as a consumer if the carriers don't compete?
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Someone wrote this. Keep in mind that the Canadian government has been trying for years to get a 4th major carrier to drive competition in Canada without success.
The FCC and the Department of Justice should not allow such a deal to go through! 3 big wireless carriers do not equal competition, they equal collusion, let's take a look at a northern neighbor across the border, Canada's wireless industry is a PRIME example that 3 big super power companies would collude even without having to meet in secret meetings!
yes, the Big 3 Carriers in Canada are involved in tacit collusion. But that's legal so the government can't do anything about it.
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"An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Oligopolies can result from various forms of collusion which reduce competition and lead to higher costs for consumers.
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The problem with your analyst in my view is that T-Mobile has the far superior management team, and like Apple when releasing things like the iPod and iPhone, they are willing to take risks. If Sprint takes over T-Mobile, Sprint will want to have a say in the management, and Sprint will want to recoup its investment as quickly as possible. Further, as others have pointed out Sprint comes with a lot of baggage in terms of competing technologies. None of these things bode well for consumers.
Moreover, the biggest problem might be the damage that will be done to T-Mobile while waiting for regulatory approval that may never come. There is a reason AT&T had to pay T-Mobile 6 billion dollars when the deal fell through. T-Mobile had to sit idle for nearly a year. It could not acquire spectrum, and was not competitive until the deal feel apart. T-Mobile lost millions of customers while it sat waiting.
I also suspect T-Mobile is kicking Sprint's butt right now and taking quite a few of its customers.
Yeah I'm beginning to feel like it's just not going to happen.
Looking at the document from the DOJ when they sued to block the AT&T buyout of T-Mobile, one could just replace every mention of "AT&T" with "Softbank/Sprint" and all of the same issues would apply. Maybe even worse now that T-Mobile is doing well.
It might be best for Son not to even formally make an offer and back down. That way he avoids the hefty breakup fee to T-Mobile that he says he can't afford.
Looking back it probably would've been smarter for him to purchase T-Mobile first anyway. Then with Sprint floundering near bankruptcy a year later they could've argued that Sprint needed to be acquired in order to avoid insolvency. T-Mobile adding more customers than all the carriers right now doesn't present a good reason to the DOJ for them needing to be bought out.
Looking at the document from the DOJ when they sued to block the AT&T buyout of T-Mobile, one could just replace every mention of "AT&T" with "Softbank/Sprint" and all of the same issues would apply. Maybe even worse now that T-Mobile is doing well.
It might be best for Son not to even formally make an offer and back down. That way he avoids the hefty breakup fee to T-Mobile that he says he can't afford.
Looking back it probably would've been smarter for him to purchase T-Mobile first anyway. Then with Sprint floundering near bankruptcy a year later they could've argued that Sprint needed to be acquired in order to avoid insolvency. T-Mobile adding more customers than all the carriers right now doesn't present a good reason to the DOJ for them needing to be bought out.
Softbank should have just bought T-Mobile in the first place. This way, Dish would have bought Sprint and that would have solved everything.
Considering that CDMA/GSM will eventually go away and become VoLTE, I don't think the incompatibility will be a big issue. Even if the two companies merge, they will keep their respective phones and towers until VoLTE become widely available. It wouldn't make sense to convert everything to old technology and then convert them again later. I see not much change even after the merger for another 2 years.
Considering that CDMA/GSM will eventually go away and become VoLTE, I don't think the incompatibility will be a big issue. Even if the two companies merge, they will keep their respective phones and towers until VoLTE become widely available. It wouldn't make sense to convert everything to old technology and then convert them again later. I see not much change even after the merger for another 2 years.
Not only must this be blocked - I'd like to see all of the cell carriers broken up into smaller entities, cable ISPs too.
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There's no contract with T-Mobile. So even if they got purchased and you wanted to leave, there would be no penalty. Soooo glad I ditched ATT. I always hated having them. Glad to be back on T-Mobile.
While true, I wouldn't want to be any part of Sprint and their downfall to T-Mobile if this purchase was to happen. Personally I want Sprint to just go away and leave T-Mobile alone. T-Mobile is the only one making strides in making changes, Sprint would only put a hamper on that.