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Big Telecom: Terms Set For Sprint To Buy T-Mobile For $32B
First time accepted submitter Randy Davis (3683081) writes 'A report from Forbes says that Sprint buying T-mobile for $32 billion is almost done. This will clearly rock the top two telecommunication companies in the U.S., Verizon and AT&T. The news report also said that T-mobile will give up 67% share in exchange of 15% share of the merged company. Officials of both Sprint and T-Mobile are confident that FCC will approve this deal since AT&T's $48.5 billion acquisition of DirecTV got approved.' One reason for that confidence: "The predominant feeling is that combined T-Mobile and Sprint will be able to offer greater competition to Verizon and AT&T , ranked first and second respectively in the U.S. market. It will also give Sprint greater might in the upcoming 600 megahertz spectrum auction, especially since part of it excludes both Verizon and AT&T from bidding."
InforWorld puts the potential price even higher, and points out that the deal could still fall apart.
InforWorld puts the potential price even higher, and points out that the deal could still fall apart.
Also, AT&T's acquisition of DirecTV has not yet been approved. Huge factual error in the summary.
The obvious problems here is #3/#4 merging meaning less consumer choice and higher prices and worse customer service ahead. Not that Sprint and T-Mobile aren't the worst already in customer service but this is a lose, lose all way around. I also can't help to think how Sprint's acquisition of another carrier, Nextel, didn't bode well for subscribers on that network either. I seriously doubt that the DOJ or the FCC will block it though since T-Mobile has been up for sale for quite awhile. Oh well folks, get ready for three Wireless Carriers in the US dominating your choice for the next few decades. I wonder if T-Mobile will re-run their cowboy ads showing the fourth hung from an old oak tree?
Harrison's Postulate - "For every action there is an equal and opposite criticism"
We need all the competition we can get in this industry. Now if this goes through and sprint becomes the same size as ATT and Verizon, welcome to the triopoly cartel of cell phone service in USA.
No, fuck you. This is exactly the opposite of introducing competition. It's an extremely shitty company with incredibly shitty service (Sprint) buying a smaller competitor with far better service (T-Mobile) in order to make a much more massive, shittier company than before possible.
This is an anti-trust violation, so fuck these guys!
But they would have to give back some spectrum which would go back for sale to someone else.
Aren't the two using two different cell technologies? How are they to be combined? Do tmobile users need to get new phones?
-- these are only opinions and they might not be mine.
I wonder how they plan to deal with T-Mobile's GSM vs. Sprint's CDMA.
"'A report from Forbes says that Sprint buying T-mobile for $32 billion is almost done."
Who talks like that? It's grammatically incorrect.
The proposed AT&T+T-Mobile merger made sense, because they both use GSM over similar wavelengths. But how would Sprint and T-Mobile combine their network services? Their voice data at least is on completely different infrastructure.
I sometimes ask revealing, often ignorant-seeming questions. Maybe they're harder to answer than you think.
I'm curious how this will affect t-mobile users that purchase their own GSM phones. Sprint uses CDMA, so the phones are not compatible with the different networks.
If increased competition is the goal, then give the smaller companies preference in spectrum auctions.
Multi-billion dollar spectrum auctions are a scam anyway, just a hidden tax that we all pay through higher cellular bills.
"The news report also said that T-mobile will give up 67% share in exchange of 15% share of the merged company"
Can someone explain that to me? They're giving up a 67% share in a company that's about to not exist in order to have a 15% share in a company that is about to be themselves that they'd effectively own 100% of, because it is them.
"One reason for that confidence: "They bribed the right politicians this time!"
If the FCC doesn't have power to regulate the internet, then it shouldn't have power to prohibit people from transmitting on any crazy frequency they want.
Actually, new Sprint phones use both CDMA and TDMA at the same time... oops, that's called GSM!
Sounds just like the GTE / Bell Atlantic merger that created Verizon.
In C++, your friends can see your privates.
That Sprint still exists
Anyone have any idea what this will do for Sprint-based MVNOs? I am quite fond of the one I use (Ting), and am curious whether this will change anything, either good or bad. (Bad would be their service getting crappier or prices being forced upwards; good would be, for instance, Sprint phones being sold that allow swapping out sim cards because they support GSM. That'd be cool.)
I disagree. 1st. tier cellphone companies DO in fact have to be big .... The dollar amounts involved to roll out and maintain a cellular network across a whole country the size of the United States is steep enough that the little guys just can't accomplish it well.
What we do have room for are the 2nd. tier "regional carriers" -- and personally, I'm disappointed we haven't really seen more happening in that arena. If you're not big enough to compete with the likes of Verizon or AT&T in nationwide coverage, fine. How about focusing on providing top quality coverage and customer service, with good data performance, all within a few states?
For many years, I had an account with U.S. Cellular, in St. Louis, Missouri, and was very pleased with them. Their little marketing strategy of "all incoming calls are free" meant I didn't really need to buy a lot of cellular minutes on my plan. (It's relatively rare I place a call to someone vs. all the times I'm taking a call.) Signal strength and call quality were excellent too. Really, the only downside was a relative lack of choices in phones, because you had to select one designed to work on their network - and they didn't have as much pull as the top carriers to get the latest handsets first. Still, they'd typically manage to get at least 1 or 2 of the "hot" phones out there at any given time. (I had a Motorola Razr flip phone with them, when it was still the in thing.)
T-Mobile, IMO, has really gotten on a roll with upgrading its network to become something respectable. It has a lot of issues still, but as a current customer, I see evidence all the time that change is happening. (My phone has carrier updates pushed to it practically every week, as new towers come online.) Just last week, something changed where I live, too. For a couple days, all of us received "no service" or weak signals throughout the business day, but then suddenly, things came back up with a signal strength far superior to what we ever had before. (I used to use a signal booster in the house, but was able to turn it off after the upgrade.) Can't say if it was a new tower, or a modification or repair made to some existing one -- but it was a nice improvement.
It certainly is not anti-trust territory, but I did in fact leave Sprint because of their appalling customer service. I've been with T-Mobile for probably 10 years or so, though on prepay for the last 2.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
The Nextel merger worked out pretty poorly for Sprint. Remember why? Because their two networks were incompatible, yet Sprint was required to keep it operating. It didn't get 3G upgrades, yet they had to keep operating until quite recently. There was a massive customer exodus, and Sprint was left holding the bag.
T-Mobile, similarly uses a different and incompatible 3G cellular standard than Sprint, and on entirely different frequencies. Yet Sprint is out to do this all again.
Seems like they've been planning this for some time, and are absolutely dependent on the merger going through, because Sprint has been a complete laggard with LTE deployments, despite their massive modernization effort, and doesn't seem to be trying AT ALL.
Frankly, the Nextel merger could have given Sprint the best network and LTE coverage around, as a happy-accident... Nextel, with their 800MHz spectrum had great coverage, on-par with Verizon's, particularly in mountains, valley, indoors, etc. AT&T and Verizon spent their 800MHz spectrum on 3G networks and have none left. They're using 1900MHz spectrum for their LTE networks, with a resultant reduction in coverage depth.
Sprint wasn't allowed to touch Nextel's spectrum, in the 3G days, so they only freed up their big block of 800MHz when LTE was first being deployed. With a little foresight, they could have put 800MHz LTE radios on their towers, and immediately boasted the best LTE coverage. With great LTE coverage, they could save money by neglecting their 3G network, and pretty quickly stop selling phones that are able to fall-back to anything other than 800MHz LTE. After all, LTE can do simultaneous voice and data, even if AT&T and Verizon have been slow to use it, perhaps for the above reasons.
But Sprint was half-hearted about their great opportunity... first saying they'd use some of that 800MHz band to improve 3G coverage, then later retracting that incredibly stupid idea. And while they've promoted their "Network Vision" upgrades for a couple years, they've still only very slowly expanded their LTE coverage to more than the very biggest urban areas, even skipping some major ones.
And they didn't ever leverage the WiMax network they spent so much money deploying. Sure, it's not LTE, but by just releasing a dual WiMax/LTE phone, Sprint could have boasted the biggest "4G" network from day #1, and they could have begun LTE deployments everywhere they didn't have WiMax, giving wider coverage, quicker. Instead, there's no WiMax/LTE phones to be found, and their LTE deployment simply overlapped their early WiMax deployment, resulting in no net-gain of extra coverage area.
I'm cautiously hopeful that this merger will be what they need, to finally compete. But each time before that they've gotten a big opportunity, they've squandered it. From the outside, Sprint seems to be deeply dysfunctional and lacking in any foresight or innovative ideas, copying the big two in the slowest and least efficient way, possible. The opportunity they have to merge the Sprint and T-Mobile LTE networks with dual-band phones, and quickly deprecate their 3G networks, seems just as likely to be squandered and bungled.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
Sprint can't give up on LTE. Sprint 3G IN THEIR HQ CITY is worse than dialup. Go to a baseball or football game here and you can just forget about having any data at all, which is funny, because they're a big Royals sponsor and have all kinds of in-stadium promotions where you text or tweet something, or use MLB At the Ballpark, or whatever. They keep saying "network vision is going to be awesome!" but I got tired of years of that promise never materializing and jumped to TMobile. And I have a close relative who works for Sprint.
Doesn't this mean that *Softbank* is buying T-MO? I realize that mechanically Sprint is "a wholly owned subsidiary" or something, and can go about buying other corporations, But in the end the control of what (is now) T-Mo does will come from HQ at Softbank, yes? (Naturally, they'll have to sign and abide by agreements with the NSA, FBI, other security interests, etc. etc.)
Nice knowing you T-Mobile, it will be sad seeing you run into the ground. Say hello to Nextel when your face is in the dirt.
I think it's generally assumed that a poorly regulated monopoly is bad -- rent seeking, no innovation, etc. A duopoly isn't much better, even when it's not explicit you end up with defacto collusion on pricing and market segmentation.
Is a triopoly any better? Is there any economics that says how many vendors in a market are necessary to improve efficiency and consumer choice?
2 different systems on two different spectrums using 2 different technologies. Nextel II electric boogaloo. Just when you thought Sprint couldn't get any worse. Sprint is now the biggest reseller of AT&T minutes. Awesome. They will exit the branded retail market soon.
That is the motivation, nothing more.
The Nextel merger worked out pretty poorly for Sprint. Remember why? Because their two networks were incompatible, yet Sprint was required to keep it operating. It didn't get 3G upgrades, yet they had to keep operating until quite recently. There was a massive customer exodus, and Sprint was left holding the bag.
T-Mobile, similarly uses a different and incompatible 3G cellular standard than Sprint, and on entirely different frequencies. Yet Sprint is out to do this all again.
This is going to be Apple buying Next, not Sprint buying Nextel - it's said that most of the TMO execs will be holding the reins..
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I switched from Sprint to US Cellular when I moved to Maine for graduate school. They were the only carrier with decent reception there, and were recommended to me by nearly everyone I asked. I too had a Razr flip phone, and my experience was fine.
Now, a regional carrier works fine for some people, but doesn't really cut it for others. Today, I'm on AT&T and wouldn't even consider US Cellular. That's because I no longer live in Maine and travel (for business and for pleasure) quite a bit. What good is a cell phone if I can only use it in my own neighborhood? It's one thing to rent a phone when you fly to Japan or get a local SIM when you land in France, but nobody wants to deal with this much hassle when they're just driving to the next state over.
Chuuch. Preach. Tabernacle.
I'm a T-Mobile customer, specifically because I have a GSM phone (Sprint ditched/is ditching GSM last I heard) and because T-Mobile doesn't have any stupid contracts. I pay, they give me service, we're both happy. I LIKE T-Mobile. Sure, I don't always have great coverage. it's a minor distraction at worst. It works fine.
I have my own phone (I buy used Nexus S phones, and reflash them with the latest stock Android. No stupid carrier BS on my phone!). I LIKE paying $150 for a phone, and still getting the latest wiz bangs. I LIKE not having a contract. Yes, I even like feeling a little superior to the Morons that buy new phones every 2 years and shell out $ for something that's not really essentially any better than what I have.
Damn. I hope Sprint doesn't buy T-Mobile. If they do, I hope they don't F it up...
In the U.S. cell phone market, when people who aren't RF engineers say "CDMA", they usually mean the CDMA2000 stack.
I've been on MetroPCS since 2006, which is now owned by T-Mobile. So I guess I will be under Sprint soon. If it changes my service for the worse, I will have to switch to one of the independents.
If you think I voted for Trump because of this post, you're wrong. I voted for Dr. Jill Stein of the Green Party. Again.
So death to T-Mobile. Less choice worse service for the mobile consumer.
Sprint will gut and destroy T-Mobile just like they did to NEXTEL.
Ware do I go now? I left Verizon for what eventually devolved into AT&T jumped that ship for NEXTEL.
Then Spint raped NEXTEL to death so I fled to T-Mobile.
gonna be interesting. T-Mobile uses GSM but Sprint PCS doesn't. or maybe I'm behind the latest news. I wonder if T-mobile or Sprint will change their phone plans. T-mobile is nice. I still have an old phone that has 1900 and 900 MHz and Edge, I think. 2G internet is really slow. lol
Only real downside of T-mobile is that it doesn't work inside big buildings. Maybe my phone is too old and 2G has issues with modern buildings with lots of metal and concrete. The pay as you go plans are decent. can't wait to find a job then I can switch to a monthly data plan for about $50.
No you dumbass.
You need a minimum of 3 viable (read national) competitors to actually have competition. Most of the US there is only one cable co and only one wireline telco. Wireless does not make a 3rd option, as wireless is entirely non-viable to use instead of the cable/phone company. And when your phone company is also the wireless company that means it's not even considered competition.
It may take some time to remember, but the last time there was viable competition, it was before Cingular merged with AT&T Wireless. Every merger after that has resulted in less competition with:
a) The people who hate the merging companies bail out to one of the non-merging companies they consider less evil
b) They say to hell with it and quit using the services.
Most people pick option A, but there is a lack of choices.
Arguably, T-Mobile has the best plans and the second worst devices. Sprint has never been a first tier provider because they have never had the bandwidth, and when they miscalculated things with the WiMax, Clearwire, and even when they purchased the entirely-incompatible Nextel. Sprint is like the wanna-be-a-loser-forever by constantly picking the wrong horse. T-mobile would be better off purchased by a Canadian carrier.
T-mobile has indeed been on a roll with upgrading it's network.
It's interesting to note that this was made possible by a $3bil cash infusion from AT&T because AT&T failed to complete their attempted acquisition of T-mobile a few years ago. So even if Sprint fails to complete their merger attempt, they obviously won't have to pay up quite as much, but they're likely to have to fork over something, which could result in even more expansion of T-mobile's network.
(I'm a current t-mobile customer and the coverage is quite decent in the northern NJ/NYC area, I too have noticed coverage in areas around me moving up from 3G to LTE service).
AT&T and Verizon can pick over the corpse. That's a near certainty. Sprint will be $54 billion in debt with a shrinking customer base and nothing but the same disasters on the horizon of pretending to 'integrate' two absolutely incompatible networks. It's as if Sprint is run by the Federal government or the Soviet Union.
If Sprint has $32B to spend on a merger, perhaps they could spend $16B to upgrade their AWFUL network. I bailed from Sprint to T-Mobile due to coverage and usability issues.
Yes, T-Mobile seems to have coverage issues in some areas, but I've been able to completely, and to my satisfaction, mitigate them with the Wifi-calling feature.
Sprint had huge sections of my company that poor to no coverage. Calls dropped, data was unusable. 9 hour battery life on an S3. We had wifi for the data, but no relief for the calls. The other 3 major carriers had strong 4g signal throughout the property (Casino resort in Las Vegas).
Sprint pathetically fumbled the ball when it came to 4g, leaving some areas with 3g and 4g-wimax. Then they stopped selling Wimax phones in favor of 4g LTE phones. This seriously degraded the 3g experience everywhere I went. Orlando, Miami, Boston, Reno, Biloxi, Philadelphia, etc. were all places where I found the 3g to be unusable and on the rare occasions I got 4g it performed like 3g. My guess was that they were using the same 3g bandwidth backhaul to towers that had 4g equipment.
The short version for me was that it was years after every other carrier had 4g before I started to see the little 4g icon on my phone and a good year after that where it performed like everyone else's 4g in the much smaller number of places it was available.
In places like the LV Convention Center, I eventually had to turn off 4g because the phone would hold onto an unusable 4g connection rather than connect to the usuable (yet still slow by 3g standards) 3g connection that was apparently an in-building thing. Luckily the convention center had wifi so I could get data, but my call/text experience was pretty poor.
I don't have these problems with T-Mobile, nor my Verizon work phone. Some people here would use their work phone as a hotspot for their Sprint personal phone. My t-mobile phone does drop down to Edge at times, it's slow but consistent and has pretty good latency. The few places where I've lost voice AND data had wifi so I was fully functional which couldn't have happened with Sprint.
I can't help but think that for many years, this will be a bad experience for T-Mobile customers no matter what and a mixed bag for Sprint customers if they transition away from CDMA. I see a lot of people reluctantly jumping ship to Verizon or AT&T once the merger is final and network changes begin rolling out.
This is a lot of great info, but what I want to know is will Sprint move to GSM or T-Mobile to CDMA?
I have a Verizon CDMA phone, and *HATE* it. Call management (3-way or more, call waiting, etc) is a nightmare on CDMA. Plus, CDMA is not common outside North America.
I really hope to see Sprint drop CDMA, but will they, or will they remove features from their T-Mobile imports?
Grammer Nazis - I mod you "troll" unless you actually add something on-topic. Yes, I know I have mispellings in my sig.
Sprint MVNOs have pretty low prices, but their coverage typically sucks.
Sounds exactly like T-Mo around here. Low prices and abysmally poor coverage outside of the more densely populated / business centers of our city. At least Sprint has pretty good RF coverage around our whole city, that is when their whole network here doesn't go down.
I can see why this deal is good for Sprint (they grow in size at a cost way cheaper and easier than self-growth) and T-Mobile (they get a lot of money) but this is most definitely NOT good for cell phone customers. Reducing the number of competitors from 4 to 3 will just increase the market leverage of the surviving 3 providers which will result in their product offerings and service plans being less competitive for cell customers. Do they think we are idiots? Reduced competition is great for the bottom line but leaves customers with fewer choices and higher costs. Beyond a certain size (which all 4 companies are way past) there are no economies of scale that would result in lower costs for a merged company. There is only less competition that allows higher prices. So...cell phone companies...what's wrong with having 4 companies compete for my dollar instead of 3? Aren't you in favor of free-enterprise and capitalism? Or are you all becoming socialists?
I'm also a former US Cellular customer from St. Louis, and I drove from St. Louis to NYC without even so much as a dead spot in coverage. And I took I-80 across Pennsylvania, which is far more rural than I-70 is.
When Sprint bought out USC, there was a noticeable degradation in signal quality. I dropped Sprint like a rock and went to T-Mobile. Maybe I should get a restraining order.
Someone with more technical expertise feel free to slaughter the idea at any point . . . . .
Get your own city-wide WIFI system installed and running with decent coverage. If running IPV6 ( where we have enough address space to pretty much give everything on the planet an address ) I would think each phone could have a permanent address so, while in range of the city WIFI, should be able to grab / make a call from anywhere without any sort of reliance on cellular signals ?
Hell, with a metro-wide WIFI in place, you could do a LOT of damage to cable and telecom profits. Only problem is you'll have to deal with them at some point since they'll own the connection point to the backbone.
Maybe one reason why big carriers fight so hard to keep metro areas from installing their own networks ?
Thoughts ?
The combined T-Sprint will have to maintain both CDMA and GSM networks for some time. I hope that the tower hardware costs have dropped and dual CDMA/GSM hardware is available. I bet there will also be significant frequency waste.
Both carriers are dragging along a wagonload of MVNOs, so customers of several other companies will see migration impacts.
Verizon is dumping CDMA for their own customers, but keeping it for the MVNOs. This will become more problematic, as Android is dropping support for CDMA, so everything on the Sprint side is going to get a bad case of bitrot.
Neither, LTE is the future.
As a T-Mobile customer, I welcome our new overloards. Ever try using T-Mobile outside a metro area (Kansas, rural Texas, etc.)? Even in some some metro areas (Omaha, Austin suburbs) coverage is horrible. Anything that gives T-Mobile more towers is fine with me (as long as it's not AT&T).