Why the AT&T and T-Mobile Merger Is Bad For Consumers
adeelarshad82 writes "AT&T recently announced that it will buy T-Mobile for $39 billion. If the transaction gets approved by the government and closes in a year as planned, it will create the nation's largest wireless carrier by far. While this is great news for both companies, analysts believe that it's an awful idea for end consumers for a number of different reasons — from obvious ones, like a rise in rates due to lower competition, to subtler ones, like more selective phone choices for consumers."
The FCC has been approving way too many mergers lately. Sirius and XM (okay). Comcast and NBC (bad). ATT and T-mobile should be negated.
FREE magazine : http://clarkesworldmagazine.com/prior/
I'm a t-mobile customer, and I for one DO NOT like the idea of the merger... I will have poorer service, higher rates, and less selection on phones... But then, I'm just a customer and my opinion doesn't count.. does it...
Time for DISH and DIRECTV to join the fun?
The one good thing that may come from that is the room for all HD channels with ALL THE EAST / WEST FEEDS.
Where was that $39 billion when it came to putting up and maintaining signal towers? Where was that $39 billion when it came to customer service? Where was that $39 billion when it came to the outlandishly expensive service?
All this money, and what does AT&T do with it? It's like a slap in the face for their own customers.
There's no -1 for "I don't get it."
It'd be great if we had a real watchdog anti-trust group around here in the USA that could actually do something about these types of mergers.
It is certainly bad for customers.
But its good for Verizon and others, because there are a lot of T-Mobile who are: "Anybody but AT&T".
If someone is passing you on the right, you are an asshole for driving in the wrong lane.
I have an unlocked phone so that I can actually change my provider if I want to. If AT&T merges with T-Mobile then my phone is locked to AT&T since it requires a sim card to function and I'm pretty sure Sprint and Verizon won't play nice with my phone.
This is where old Ma Bell ended up.
Colbert is going to have to update his take on AT&T
There is no real competition in the US mobile market, only the illusion of competition.
"I use a Mac because I'm just better than you are."
The only thing I am hyped about is a faster transition to 4G. AT&T's network is crippled in major cities, with 4G and 3G network speeds should increase over time with the load being split across both spectrum's given people move to 4G. There are good things and bad things, I don't think AT&T will hike rates because they are still competing with other carriers just not GSM carriers in the US.
TekGoblin
Verizon will start looking to gobble up Sprint. Please somebody who knows more about this sort of thing tell me why this can't happen, because that would be f'n horrible. As far as why THIS merger is bad for consumers, well yea is there even one reason why it's GOOD for consumers?
AT&T shareholders just watched their management pay way too much for T-mobile. T-mobile and AT&T employees are both now extremely fearful for their jobs, as there is almost 100% overlap in most markets in everything but customer service call centers. This goes all the way up the management chains.
This is less like "joining forces" than conquering your neighbor by buying his mortgage from the bank for double the house's value, then throwing him and his kids and your wife out on the street.
I had AT&T years ago; could never get a signal inside my house. I finally switched to T-Mobile; no problem getting a signal inside my house.
If I want GSM (so that my phone will work in the rest of the world when I travel (right?)) then I either have to have AT&T, T-Mobile, or one of the MVNOs that operate on their networks. I fear if AT&T dismantles the T-Mobile infrastructure that I'll be back to not getting any signal inside my house. Is my fear justified?
Anyone reading this story might think that AT&T had bought T-Mobile, rather than just one of their operating companies in a foreign country a long, long way from their home market.
A company practicing what amounts to price fixing pays the government to ignore the fact it will become even more of a monopoly is our top story tonight. This story and more at 11.
They haven't denied any of the other mergers that became the current AT&T.
They didn't deny SBC when they wanted to offer long distance service either.
They're not going to deny this either.
I'm rather surprised they didn't buy Comcast.
But of course, they might try it even before this deal completes.
If someone is passing you on the right, you are an asshole for driving in the wrong lane.
The USA is already a backwater for GSM service. I pay too much for AT&T, there is no competition on price or features, and now what little pathetic choice I have will be taken away. I don't want crappy proprietary technology, I want to be able to use real mobile phones that I can take with me anywhere in the world. Barring Japan and Korea, for some reason.
Let's see. You have four healthy players in a huge market. One buys out another to become the biggest. Now we have only three choices. Less choice leads to less competition. Less competition means they don't have to work as hard for our filthy lucre.
Thanks, captain obvious, for this insight. Stuff like this should be so obvious it could be used on a "voting permit application test" if we ever wanted to truly root out the potential voters so brain dead that they can't be trusted with the franchise...
A loan from JP Morgan
http://www.reddit.com/r/AskReddit/comments/g7vzu/why_the_hell_does_att_have_25_billion_in_cash/
I'm a Tracfone customer (it's the cheapest option by far for a basic phone with texting), and my current SIM card is locked into T Mobile, which has horrendous coverage in this area (Rochester, NY). My last Tracphone was locked into AT&T, which had very slightly better coverage in NY. Even Verizon has very poor coverage in a very large portion of NY. The only good thing I can see coming out of this acquisition is if AT&T combines T-Mobile's coverage with their own and my Tracphone can use both networks. Even then, I'll still be without coverage throughout a good portion of the state.
I sure hope AT&T will let me get 3G speeds on my Nexus S now. I'm stuck on EDGE. Lame.
As one of the nation's largest union employers, this bodes well for those who support unions.
This also bodes well for those in the seciton of the Venn diagram who both hate unions and think that AT&T sucks. They have a brand new outlet to scream about how lazy union workers are responsible for AT&T's sucky network and poor customer service and are going to ruin the T Mobile experience.
Go to the T-Mobile forum if you want to know how well this is flying with T-Mobile customers.
The subject should give you an indication.
I explicitly chose NOT to have anything to do with AT&T and now I am forced into it. Does that sound like free capitalism to you??
How do these acquisitions typically work? At any point, is there a chance for the public to register the concerns with the regulatory bodies?
I signed up with T-Mobile at the end of last year when I bought a Nexus S. T-Mobile has been great and I love that I can tether my laptop to my phone (or create a wifi hotspot) without having to pay an extra fee. AT&T is notorious for not allowing this and for having ridiculously low caps and I'm worried that once AT&T takes over, I'm going to lose this capability or have its usefulness seriously limited.
I would like to see the regulators require AT&T to set reasonable caps and eliminate tethering fees before allowing the deal to go through. Any way to voice this?
Because apparently AT&T wants to repurpose T-Mobile's 3G spectrum for 4G. Source: AP via Y! news.
Let's see. Everyone yells at AT&T because they can't provide the coverage and bandwidth iPhone users need. AT&T tries to install more towers but ridiculous levels of regulation and red tape either limit their ability or make it take such a long time it's the same thing. AT&T sees a competitor with towers who is losing money and wants to sell. AT&T buys said competitor as the only way to provide the support customers demand.
Customers immediately become furious with AT&T rather than the ridiculous government regulations keeping AT&T from providing desired services and demand (wait for it) more government regulation to ensure we all have crappy coverage within the United States.
People then step in and blame all the problems not on too much regulation but on deregulation. (And yes, I agree it's not just an issue of deregulation or regulation but smart regulation - however let's be honest. How often do politicians pass laws with smart regulations?)
If there was such a thing as an open service platform in the world of US - mobile it would be and always has been T-Mobile/Voicestream. In the US they have always offered and have been friendly to unlocked devices, unlimited internet, the first android, the first wifi-hotspot active phones. Their customer service is the only one I would consider worth calling or having. AT&T is closed in comparison and I've never heard someone tell me what a great service or customer service experience they have had with AT&T. We will lose in a lot of ways, but the loss of service and open platforms is the part that will hit me the hardest.
I've had both AT&T and T-Mobile in the Washington DC area. T-Mobile had less areal coverage, but when your phone had minimal signal, it typically kept it and didn't drop your call. AT&T has more bars in more places, but using those bars to make a phone call is always a crap shoot - you can have what looks like a strong signal and get kicked off anyway, or be unable to connect at all.
Much of this experience was before the iPhone - AT&T just got worse after that.
To a Lisp hacker, XML is S-expressions in drag.
And I was really getting to like that hot T-Mobile Girl.
--- If the bible proves the existence of God, then Superman comics prove the existence of Superman.
IIRC, Sprint had the chance to buy TMO. Why they didn't? Because Sprint is sitting on two redundant networks, CDMA, and iDEN. Adding GSM would just mean they have another set of towers to look after.
Instead, Sprint chose to go and work on WiMax technology... IMHO, stupid because everyone else is going LTE and with tower sharing agreements, it means not having to worry about as many antenna emplacements.
Sprint could have easily put in SIM card functionality. In fact, China, Korea, and Japan all use R/UIM cards which are functionally identical to SIM cards, except use CDMA technology. Sprint and Verizon chose to break the standard and not have that technology in their devices.
The future will be interesting when everything goes LTE/WiMax, and the older technologies get shut down, just like AMPS did. Sprint will be on its lonesome with their Clear stuff, and everyone else will be tower sharing.
Marketwatch had an editorial on this as well.
Who regulates this-- the FCC or the FTC?
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This is my SIG. There are many like it, but this one is mine.
Even back when iPhones were the only real smartphone in town, I held off because I didn't ever want to to business with AT&T again. The reason I resisted the Apple siren song was because AT&T service sucks, and they have no respect whatsoever for customers.
I was glad I had when the Nexus One came along, because I think it's better than an iPhone anyway, of course. I've also been very happy with T-Mobile's service. Now I see the Death Star approaching, and I know my happy little world is probably doomed.
You can go to Verizon or Sprint, only if you are willing to go CDMA. If, like me, you have a perfectly working unlocked GSM phone and do not want to deal with the devil, you are pretty fucked.
As I understand, everything else (from MetroPCS, Virgin to Sprint/Verizon) are on CDMA.
With this merger, we should finally have quality GSM coverage in the United States. I will bemoan the superior T-mobile customer service, but I had to switch from T-Mobile to AT&T when I lived on the Pacific coast for coverage. The fact is that there isn't really room in the US for two GSM carriers.
For those who think AT&T could have just expanded its coverage, go look into the issues every carrier is facing in San Francisco where new towers face "OMG - the Radiation!" from the residents. Buying T-mobile was the best realistic way to expand coverage.
Even back when iPhones were the only real smartphone in town,
Wait, iPhones were the only smart phones? When did this happen? Was that back when they couldn't send MMS text messages?
You freeze it, break it to pieces, and over a small amount of time it melts and re-forms itself to continue the assault.
Where's a vat of molten steel when you need it?
The one notable thing about the N1 is the fact that if you are clued enough to fire up adb and fastboot oem unlock it, the device is yours to install what the heck you desire on it.
I really hope AT&T inherits T-Mobile's hacker-friendliness. This way, a device that is bought unlocked and not connected to a provider, such as a Nexus phone, or some of the higher end HTC phones several years ago could be used.
I personally would pay some more (although not double or an insane amount) for a device that is made for people to root/jailbreak/re-ROM, something like a modern version (with a decent dual core CPU, decent memory, etc.) of the N900 that ships with Android, but can have any OS of choice put on. Let people who think rooting is wrapping plant tendrils around a device keep buying consumer level units; it would be nice to have a "pro" phone that is well designed and made for techies.
For example, take the Motorola Atrix. Yank the signed kernel protection, et al. Have source code, binaries, and OS images available for download. Charge $100 more. This would be an ideal device. Perhaps have Webtop as a Linux distribution so it can easily be modded, perhaps built from source like Gentoo.
Since the hardware would be identical to the "consumer" model, economies of scale would be to AT&T/Motorola's advantage. The hardware modders would be happy, and the additional cost would not just cover the cost of having the files available, but also cover the dumbasses who call in to customer service with "I just re-ROMed my phone with an alpha build, and bluetooth doesn't work." Also, since the baseband chip is separate, there are no issues of dangers to the cellular network.
Ahh, that $39 billion never existed. AT&T has simply offered T-mobile stockholder stock in AT&T, i.e. they're simply offering $39B of their shareholder's money. You rarely see share holders paying out for improving infrastructure, but they'll somehow always get conned into ponying up for mergers.
In fact, such mergers almost never help the shareholders of the acquiring company. Cash acquisitions average out about like investing in the S&P500. Stock acquisitions almost always cost shareholders significantly, i.e. the acquiring company overpays. Yes, the academic business literature has researched this question extensively.
I'm unsure how the stock holders in the acquired company fair, presumably they realize a short term gain, but basically all their long term investment strategy and research work gets shot to hell, costing them valuable effort instead of money.
Who benefits? Ahh, that'd be the guys who went from running a company worth $160B to a company worth $200B. Yeah, their stock took a hit, but they'll just increase their stock packages accordingly. See how that works?
Virtually all stock large mergers are bad for the economy, bad for stock holders, bad for employees, and bad for consumers.
Imho, we should require that public companies engaging in an acquisition over $1B and over say 3% of their market cap to declare a 5 year target stock price. And indemnify all stock shares except those held by the board of directors and the executives against any short fall below that price that could be traced to the acquisition. In a stroke, that'd ensure that those making the acquisition decisions took the brunt of the stock price hit, thus ending these ridiculous scams.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
Yeah, but I highly doubt Sprint wanted to buy Tmo either. Remember the last time they bought a carrier with incompatible technology (Nextel)?
Those radio "tuned" front ends are tuned very broadly, and the "radio" is essentially nothing but a fast flash A/D convertor connected to an RF amp and a DSP. It's a firmware radio.
Hey - this is slashdot - where we always jump to conclusions without hesitation!
As for the merger - it will be bad for international roaming customers. No competition on the GSM technology means that European visitors to the US will be even more screwed.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
Seriously. I moved to Android/Verizon a year ago and I've enjoyed the ability to make phone calls. Now that this deal has been announced, I just checked with VZ and moving my girlfriend to an iPhone on my account (sharing minutes and messages) will cost almost $40/month less than AT&T. Plus we'll be able to talk to each other! Her ETF will be about $235 depending on when we do it (might wait for next gen phone), but at $30/month savings (ETF goes down $10/month, so I have to factor that in), we'll be ahead within about 8 months. Oh, plus it looks like I can get about $325 for her existing iPhone. So... thanks, AT&T! I'd have waited through the rest of her contract like a chump if you hadn't rubbed our noses in your douchebaggery.
Slashdot, please do a poll on what effect customers think this will have on the quality and price of mobile services in the US.
"While this is great news for both companies, analysts believe that it's an awful idea for end consumers"
ur new to this idea of capitalism; right?
warning pointless sig
That's not quite the case - a lot of the radios have hardware filters that can't be removed very easily - you'd be looking at desoldering surface-mount components and then replacing them with other versions...and then recertifying the entire thing to make sure you can still transmit without breaking FCC regulations (at least in the States.)
The OpenMoko FreeRunner came in two versions - 900/1800/1900, and 850/1800/1900. It is not possible to change frequencies, and almost the entire phone is open to modification by the user.
The problem is: T-Mobile's 3G sites are all in the 1700 MHz band. No AT&T handset supports UMTS1700 to my knowledge
My first thought, when I heard about the merger, is that AT&T must have access to some new radio parts that also include the 1700MHz band. This must have been in the works for some time; I wouldn't be surprised if new AT&T phones by summer supported the T-Mobile bands, at least in hardware if not enabled.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Seems like this is also very bad because T-Mobile has been extremely uncooperative with the Gov't's PATRIOT Act requests, and ATT was one of the first and worst to kowtow.
-taosk8r
You wrote my reply for me, nearly word for word.
The duopoly that results (sorry, Sprint and Clearwire are dying)
Now that AT&T will be the largest carrier, by subscriber count, it's a no-brainer for Verizon to buy out Sprint (1:10 market-cap ratio). Then they're on top again, and their phones are already compatible.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
"invisible hand of the market" will come in disguise, on its horse and black mystique mask, and will fix it for you.
of course, it may take 5 years, and in that duration, at&t may be deciding what services and even websites you, your kids, family will be able to access from their phones, and for what price, but hey - in the end, its all good right ?
no. it isnt. i want my kids, family to have REAL choices. not superficial choices that exists somewhere else in some faraway state, just fulfilling the 'competition' requirement in appearances.
but then again, this is what capitalism is right ? a transitionary phase until the holdings get consolidated into big feudal farms. just like how it happened in between 300-600 AD.
Read radical news here
If AT&T had the $39B to buy another carrier, couldn't they have spent a fraction of that to upgrade their network, both wireless and wired?
In either event, I'm not sure who this merger is good for. Its not good for consumers, its not clear its good for AT&T or any other shareholder.
This really has very little to do with government regulation either way. AT&T is free to buy more bandwidth, they're free to put up more towers, they're free to lay more fiber, they're free to buy more network infrastructure.
Seems to me they simply panicked now that the iPhone is no longer exclusive, so they're looking to prop up their revenue stream by restricting competition and raising prices.
If this isn't a case for government to step in and say "no", then I'm not sure what is.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
Has anyone emailed or called the FCC and the FTC and told them that the merger shouldn't be allowed? I wonder if people even know that that the FCC and FTC exist and have the ability to stop ridiculousness like this. Everybody I know is giving up hope because they believe they have no way to make a difference!
I say NAY! I can make a difference about this whole thing! I emailed the FCC and the FTC, I emailed my Congressmen, and I emailed my Senators about this whole thing. Every single one of you reading this article and not liking what is happening should do what I did. If you can, do more! Spread the word about contacting the right people to protest it. Start a petition if you wish. Call those agencies and tell them they shouldn't allow the acquisition!
Americans do have power, we are just trained not to use it! So get off your asses and DO SOMETHING ABOUT IT!
This has been a public service announcement by RoyalGeekWorld Enterprises, a subsidiary of Binary Outcast. :P
Conservatives like to talk about the "power of competition", but also call anti-trust "government interference in the marketplace". Well, you can't have both. You pretty much need government regulation to avoid big oligopolies.
Thus, my fellow conservatives, pick one and only one: competition or deregulation.
Table-ized A.I.
How long before T-Mobile's reasonably-priced prepaid plans vanish? I give it 6-12 months.
why only there's one company that makes Monopoly
Ooo! Ooo! I want more selective phone choices! I, for one, welcome our new, more selective, corporate carrier overlords!
(But seriously, if WE can't manage to say "fewer / less / limited / restricted / a paucity of / really crappy / sh!ttast!c" when we mean it, then the truth is already lost.)
"We reject as false the choice between our safety and our ideals." --The American President (20.1.2009)
Yes, multimedia smartphone is what I meant. There were many PDA type phones about that were billed as smartphones (in fact I had one); I should have been more specific. Point taken!
We're the phone company. We don't care. We don't have to.
This would be a greater monopoly then MS is on pcs.....I think it should not be allowed, and would prove to be costly to users, already we pay more then anywhere else in the world for cell plans, now they'll spike it up even more.
If this goes through (and it probably will), AT&T will loose half (if not more) of those T-mobile customers to Verizon. Verizon will win on this and AT&T will probably loose money.
Athiesm is a religion like not collecting stamps is a hobby.