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T-Mobile Merging With MetroPCS
Daetrin writes "Last year T-Mobile tried to merge with AT&T but the deal was blocked by the FCC. Now T-Mobile and MetroPCS have agreed to merge in a $1.5 billion deal. There doesn't seem to be much concern that the FCC will disagree with this deal, perhaps because the two companies combined will have a user base of 42.5 million, which will still be smaller than the #3 player Sprint's 56.4 million. Because the two companies have similar spectrum holdings T-Mobile claims the merger will allow them to offer better coverage. They also say they will continue to offer a range of both on and off-contract plans."
Will they keep Carly Foulkes?
The German Juggernaut strikes again!
And therein is the lie. Because the FCC hasn't, to the best of my knowledge, allowed a merger in recent history between a major carrier and a smaller one without imposing the requirement that substantial amounts of overlapping spectrum be disposed of. Both carriers have nationwide AWS, and while MetroPCS's PCS spectrum is more limited, it exists mostly in areas that T-Mobile already has coverage.
So what does this mean in practice? It means:
- Less competition - less incentive to reduce prices or improve services
- Another round of layoffs, probably numbering in the thousands, possibly tens of thousands.
- More customers on less spectrum, with at least initially multiple network standards making spectrum sharing even harder.
- More costly spectrum refarming
- Either maintenance of four largely incompatible networks (2GSM, IS95/2000, UMTS, and LTE) or the migration of all IS95/2000 customers to 2GSM/UMTS/LTE, at considerable cost.
- Funds spent on the above that could be spent on rolling out 3G to uncovered areas, or rolling out LTE. Or improving their deteriorating customer service.
Oh, and to add insult to injury, there'll be one less alternative existing T-Mobile customers can jump to in the event T-Mobile gets worse. Which it will.
Also, from a phone geek's PoV, this is a merger between a company that's always been hostile towards customers having control over their own devices, and one that used to be liberal on the subject but has become more and more controlling lately. And directors of the former will be taking up prominent roles in the new company.
This is a terrible, terrible, idea, and the people behind it are terrible, terrible, people.
You are not alone. This is not normal. None of this is normal.
Also, from a phone geek's PoV, this is a merger between a company that's always been hostile towards customers having control over their own devices, and one that used to be liberal on the subject but has become more and more controlling lately. And directors of the former will be taking up prominent roles in the new company.
Yet I've been with T-mobile for 10 years now (Powertel -> VoiseStream -> T-Mobile) and I have yet to experience this hostility you speak of. Neither have the friends I know on MetroPCS and T-Mobile.
They did that for all the smart phones, basically the feature phones that were incapable of using much data had a different plan than the smartphones that could use a lot. Makes sense to me.
Now they have true unlimited data for $20/month.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
I'm sorry to those folk on MetroPCS that have a "cool deal" that's just right for them, that may be swallowed up into "like but not quite matching" T-Mobile billing plans. I know this can be annoying.
That said, AT&T's problem (and reason for wanting to buy T-Mobile) was bandwidth starvation. The GSM carrirers are obligated to keep some spectrum on 2G, have a large base of phones on 3G, and desperately need LTE to meet their future bandwidth needs. So any spectrum they can buy/merge with while meeting their current obligations, can all be 4G. It's like an increase in discretionary spending, even a 25% increase in net income significantly improves your quality of life. In some places they'll have 50% more bandwidth than AT&T and 50% fewer customers. Even if you have to pay $5 a month more for your newly-mergered data plan, I think when you look over at another booth in the restaurant and see the occupant watching a pixelated 480x320 Netflix episode on his fabulous Retina Display... and your Nexus 7 wifi-linked to your phone is wall to wall sharp pixels, it will feel like win.
You're seriously suggesting that AT&T, with their $4.5 million in contributions (20th largest) this election cycle and $31 million in lobbying (5th largest) in the last 2 years alone, doesn't know how to lobby effectively?
I am officially gone from
I'm a subscriber, I wrote it while the article was still red. Although yes, I did know about the merger earlier this morning, Slashdot wasn't exactly first with this news.
You are not alone. This is not normal. None of this is normal.
Being as I drive through two dead spots on my way home from work, and drop calls while sitting on my couch (where their map claims I should get two bars), I'm pretty sure the coverage can't get much worse. I laugh at people who bitch about lack of 3G/4G/29G ... I can't even get a signal for a voice call.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
*sigh*
OK, here's the deal.
When you subscribe - which you did originally to remove ads and to block people commenting on your journals that you'd rather not - you get one additional perk which is to see the articles 30 minutes early. They appear with red banners. And thus you have time to craft an "on topic" early post.
There's no conspiracy, and I've been a Slashdotter for over a decade now as my comment history and tiny six digit user ID (I remember when that would have been a joke...) demonstrates. You'll also find, if you're that paranoid that you have to read it all, that I've been a T-Mobile customer for nearly a decade now, and have commented as such, repeatedly.
You are not alone. This is not normal. None of this is normal.
You're seriously suggesting that AT&T, with their $4.5 million in contributions (20th largest) this election cycle and $31 million in lobbying (5th largest) in the last 2 years alone, doesn't know how to lobby effectively?
Yes. I mean, they lost, right? Clearly, they did not spend enough.
I'm not doubting you, but I had no such experience from T-Mobile. They always unlocked my MyTouch phone 3 weeks after purchase. Waiting 3 weeks allowed me to simply return the phone if I didn't like it. T-Mobile even went out of their way to make sure my MyTouch 3G and later MyTouch 4G was unlocked in time for me to use Vodafone while I was in Australia.
I'm also able to use my grandfathered data plan with my MyTouch phone. However, I did have to leave my really cheap 2G data plan for a more expensive 3G data plan (still cheaper than today's plan) back when 3G first came available. I'm still on that 3G plan and have access to both 3G and 4G features of my phone.
These comments are my own and do not necessarily reflect the views or opinions of my employer or colleagues...
What is your deal? I've seen you post this comment almost word for word on various other sites.
You've got some good points. But a lot of your argument doesn't seem to be about those points. Your argument seems to mostly have a emotional basis to it. As if you don't like the company/ies involved for whatever reason that you don't seem to be saying.
T-Mobile just has to maintain the cdma network for a little while. Years perhaps. Customer and hardware turnover will get customers onto hspa/lte compatible hardware. A lot of MetroPCS customers already have lte compatible devices. From the google search I see that it's hardware that's able to handle VoLTE. T-Mobile can make a push to improve the lte coverage and current MetroPCS hardware will be able to work without the cdma network. In the meantime they can continue to roam onto sprints network.
The maintenance of four different networks isn't really even a big deal. With the tower equipment that T-Mobile is using and deploying is capable of running all four with either a software update or very little hardware changes. I feel that you are also being a bit disingenuous with this argument since 2GSM UMTS/HSPA and LTE are in the 3gsm family and were designed to do handoffs with each other, cdma and lte were not so much.
As for the FCC requirements you don't actually know that the fcc is going to do that. The last few years it's been the two big dogs that have been making acquisitions. Those are different stories and I wouldn't use them as examples for a company the size of the new T-Mobile. If the new T-Mobile does indeed have to give up some spectrum we won't and don't know how much.
The technical issues you listed just don't seem to be that big of an issue. This is a business move. This is about combining two companies for the synergies. The real winner here is Deutsche Telekom. Which can sell off stock slowly from the newly formed company.
You're real reasons really show through when you decided to use that last sentence "This is a terrible, terrible, idea, and the people behind it are terrible, terrible, people." So again I ask. What's your deal?
Then let me reply to these:
>- Less competition - less incentive to reduce prices or improve services
Mergers do that; not the best idea in a competitively shrinking market
>- Another round of layoffs, probably numbering in the thousands, possibly tens of thousands.
Sorry, that's one benefit of mergers for the companies. These days, nothing is forever.
>- More customers on less spectrum, with at least initially multiple network standards making spectrum sharing even harder.
That's until a "4g" network is rolled out. It also makes the merged body look less digestible by Sprint or Verizon.
>- More costly spectrum refarming
You must be a stockholder.
>- Either maintenance of four largely incompatible networks (2GSM, IS95/2000, UMTS, and LTE) or the migration of all IS95/2000 customers to 2GSM/UMTS/LTE, at considerable cost.
AT&T deals with this, and to a lesser extent, it will bite each carrier as well. 2GSM is on the way out; in seven years LTE will dominate, for better and worse.
>- Funds spent on the above that could be spent on rolling out 3G to uncovered areas, or rolling out LTE. Or improving their deteriorating customer service.
No, the funds were going to be spent anyway on LTE and expanding coverage. Customer service? You want service?
>Oh, and to add insult to injury, there'll be one less alternative existing T-Mobile customers can jump to in the event T-Mobile gets worse. Which it will.
We agree on this one, but Metro was having trouble with the same financing you cite as impediments to T-Mobile growth. You can't have it both ways.
>Also, from a phone geek's PoV, this is a merger between a company that's always been hostile towards customers having control over their own devices, and one that used to be liberal on the subject but has become more and more controlling lately. And directors of the former will be taking up prominent roles in the new company.
T-Mobile is no more awful than AT&T. I can get my T-Mobile phones unlocked in a few days. I can brute-force them if need-be. That a combined board might have strange people in it was out of your and my control anyway.
>This is a terrible, terrible, idea, and the people behind it are terrible, terrible, people.
I think the idea is neutral, and the people behind it are trying to survive. Can't blame them for that. How they are terrible otherwise is unknown to me, save they've squandered tonnage of goodwill. In the US, I otherwise have Verizon and you couldn't give me a free AT&T or Sprint phone and "service".
Tempest in a teapot. Not to dismiss your obvious hopes and dreams for T-Mobile, but these are carriers and they have no soul-- none of them.
---- Teach Peace. It's Cheaper Than War.
Mergers are always good for CEOs and shareholders and always bad for everyone else. It's a rule. This is not sarcasm.
Consider the whole reason Verizon and AT&T dominate the market: Verizon happened when Bell Atlantic absorbed MCI and GTE; AT&T absorbed Cingular and a few others. Smaller players still exist, but competition is hard; without mergers very small players would drop off until a healthy culture formed, but with mergers one or two parasites become huge and dominating and make it harder for smaller players to gain traction.
The smaller players can merge, gaining a stronger hand to compete but increasing the distance between them and the other small players, which then makes it hard for those small players to compete--and then they either die off or get absorbed in mergers. Eventually small players can't exist, and as they die off the larger players come to scavenge the carcasses.
Each round of mergers brings a lot of similar services under one hand, where they become redundant or excessive. Having 14 non-redundant niche services is a money sink, and so 10 of them go away and the consumer has 4 to pick from which aren't always as well-matched to the individual consumer's needs as the services discontinued. Lay-offs occur, although we can typically bring that into a cost-savings and increase in efficiency, which is less economic waste and should be good--because it SHOULD cause a decrease in operational costs, leading to a decrease in pricing of services to consumers, leaving more free money in the economy to fund new ventures that can tap the newly freed labor pool. Unfortunately, what often happens is the price stays high and margins increase, so the economy gets additional labor that it doesn't have anything to do with and we have a bunch more people unemployed.
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Both T-Mo and MetroPCS have plans to switch to LTO, so long term there is no conflict.
We hope your rules and wisdom choke you / Now we are one in everlasting peace
I was wondering the same thing all yesterday when this popped up on the wire. In fact, I had a similar concern back a few years ago on the ATT-T-Mobile linkup. After all, although ATT and T-Mobile both use GSM, they use different frequencies to do so. T-Mobile phones will work on an ATT network and vice-versa for regular calls, texts, and slow data -- but not at 3G speeds. (For the record, that is now changing: T-Mobile is now doing some 3G on the 1900MHz band that is compatible with most phones, namely the iPhone. It used to do 3G on 1700MHz, which only phones sold by T-Mobile are configured to use. But that was not happening at the time. See this article).
Moving on: PC Mag reported on a presentation the two companies released indicating that the MetroPCS CDMA network will be largely turned-off and dismantled with all customers transitioned by 2015. The brief seems to claim that customers replace MetroPCS devices so quickly as it is, there won't be a difficult public relations situation:
This means that all existing MetroPCS users will need to get new phones by then, but that's likely to happen anyway, the companies noted. "Rapid handset turnover (60-65 percent per year) facilitates MetroPCS customer migration," the slides said. "MetroPCS customers [are] anticipated to be completely migrated by 2H 2015."
From what I have read about MetroPCS, most of its customers use cheap feature phones. The idea then is that they'll tire or break their cheap phones and T-Metro will be able to take advantage of that trend to shift them over to equally cheap GSM phones to run on the legacy T-Mobile network. There are certainly a share of customers that use more expensive phones that they expected when they purchased them to be more durable and last longer than 2015 -- I would suggest that that number is small given the focus of MetroPCS on those that want what is now considered to be bare minimum for cell phone service. (talk/text/30MB BREW/WAP web).
All of this said, I will note that when AT&T/Cingular acquired Alltel, Alltel also used CDMA. I don't know how AT&T was able to make that acquisition work, but they did manage to do so -- T-Metro looks to be pursuing this transaction with a page out of that playbook.
As you can see from the responses to my comment, there's a lot of people making bizarre claims about my motives in posting it. To make a few things clear:
1. I've been a T-Mobile customer since 2002. I've recommended them, repeatedly, online and off.
2. I've been a Slashdot poster for over a decade too. I've had articles accepted. I've joined in many conversations about a variety of topics and been, uh, forthright in my views. More forthright than above, actually.
3. So it should be f---ing obvious that my posting was a reflection of my personal opinions.
However, there's something else to consider. When the AT&T - T-Mobile merger talk was going on, a lot of posters to various forums posted supporting comments that were supportive to the point of absurdity. Mergers can help customers - for example, Voicestream (T-Mobile's predecessor) is itself the merger of numerous GSM networks. They merged because each was regional, and each provided GSM in a seperate region. There was, at the time, no national GSM network, completely undermining the entire point of a mobile phone service. And so they merged. The T-Mobile/AT&T one didn't have this advantage. It was clearly anti-consumer. Before the merger there would be four national networks. After: three. And that was it.
So there was no reason to post in favor. And what those who did post was stuff like "But T-Mobile will close if it doesn't merge!" (a complete lie, and of course, T-Mobile wouldn't exist if it did merge.)" or "T-Mobile will be so much better when it's part of AT&T!" (but it won't exist, so how can it be better?)
Likewise, while some of the responses to my comment have concentrated on the advantages to DT and MetroPCS's management and shareholders (and that's where the advantages are), a few are trying the same FUD that we saw in the prior discussion, except they're usually trying to imply it's me that's underhanded when they do.
So, here's what I think.
I think there's a strong chance that those claiming this is better for consumers, or pretending that T-Mobile has to do this because they're at death's door, are actually shills. I believe this because we've seen it before, because we saw it in connection with T-Mobile before, and it's simply reasonable to suggest that the same tactics would be used for both mergers, given many of the same people are involved.
I'm not saying everyone posting in favor of this crapfest are shills, I'm saying I think a lot of them probably are. T-Mobile wants the groundwork laid so that this will appear to have a lot of popular support.
Unless you're a DT or PCS shareholder, there's no reason to support this merger. None whatsoever. And while I know many will "cheer their team", and T-Mobile is, for many of us, "our team", it's simply hard to believe that so many would be in favor of something that clearly is going to put back much needed network improvements, and cause many more job losses. I think T-Mobile has employed the shills.
You are not alone. This is not normal. None of this is normal.
Same experience here. I've had T-Mobile for over 12 years (from when they were Voicestream). I'm currently on a Galaxy Nexus unlocked and purchased straight from Google on a $50/month unlimited voice/data/text plan.
I don't know what the plans are called, I don't care. I don't see anything being blocked or limited, and I've used the phone as a NAP to link both my Xoom and my laptop into the net.
T-Mobile has phases. They had a stupid phase a few years ago. As far as I can tell, they're in happy phase now. I hope this doesn't screw it up. But even at their worst, they were never as bad as Boost was the three days I tried to get service from them.
> how would this merger work? Tmobile is GSM whereas MetroPCS is CDMA.
The difference isn't as big as you think.
The difference between legacy TDMA-based 2G GSM/GPRS/EDGE and WCDMA-based 3G UMTS/HSPA+ is HUGE. Night and day. Literally, nothing in common besides a subset of the SIM card and the battery.
The difference between CDMA2000 voice/1xRTT data and EVDO is almost as big as the difference between 2G GSM and 3G UMTS/HSPA+.
The difference between CDMA2000 voice/1xRTT data and UMTS/HSPA+ is basically the presence of a SIM card, wider channels, and some evolutionary refinements. A tri-band (1700/1900/2100MHz) phone that does "everything" would cost about the same to make as a HSPA-only or CDMA2000-only phone that has to support 850 and 1900Mhz. Mode support is mainly a matter of IP licensing and firmware. What really drives up the cost is having to support 5 or more bands spread across the upper UHF and lower microwave spectrum.
Food for thought: the ONLY thing that prevents an AT&T iPhone 4S or Galaxy S2/S3 from working on Sprint or Verizon is radio firmware, FCC certification, and business policy. Google MDM6600 or MSM8960 sometime, or just read THIS for some gory details.
I think that's why we need to root for T-Mobile to succeed - not in reference to this merger, but in general. They're the only significantly-sized company to offer cell plans that undercut the offerings of the Big Two. I know doing so is a business decision on their part, and not being done out of the goodness of their heart, but - there needs to be downward pressure kept on this market because, overall, current prices are absurd.
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