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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?
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.
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
*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.
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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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.
> Unless you're a DT or PCS shareholder, there's no reason to support this merger. None whatsoever.
Unless, of course, you're a MetroPCS customer with late-model Android phone (like the Galaxy S3) whose underlying chipset is perfectly capable of HSPA+ (assuming its soldered-in RUIM can be induced to act enough like a real SIM card to make a GSM network happy... I'm pretty sure they CAN, if push comes to shove...).
THOSE customers will absolutely be dancing in the streets, because it might mean they might get to start using T-Mobile's 6-14mbps HSPA+ network for data a few months from now, instead of limping along at ~2mbps or less on MetroPCS's EVDO, or roaming at a painful crawl on Sprint's third-world single-digit-kbps EVDO (slower than data anywhere on earth besides maybe rural Haiti). From what I've heard, even Metro's LTE is slower than T-Mobile's HSPA+.