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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.
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!
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.
Now I know that Sprint and T-Mobile don't have the best wireless coverage, but you're going to have to try a little harder to justify the claim they have the worst customer service. I was under the impression it was just a universally accepted fact that Verizon's customer service is the worst in the industry despite their otherwise excellent network service. As I've heard someone say, Verizon is the hottest girl at the prom, and worse, she knows it.
I sometimes ask revealing, often ignorant-seeming questions. Maybe they're harder to answer than you think.
It's all relative. I had Verizon and bailed to T-Mobile a few months ago. Both had okay customer service, though I did have a Verizon person intentionally hang up on me. I had to call T-Mobile on Monday to make changes to my plan - I couldn't make the changes via the web site, nor could I go to a store to do it - I had to call. The person I spoke with was pleasent enough and made the changes quickly.
As you say, they have the best network, highest prices, confusing and awful plans, and terrible ETF/subsidy policies.
until a few months ago, I was working at a cell phone tech company (android software and server back-end stuff) and we had to be able to test our stuff with all the local carriers.
we moved our site and wouldn't you know, we could not get any t-mobile reception (and I have a t-mo phone). stepping out of the building didn't help much. putting a real antenna/repeater on the roof and repeating to the bottom floors didn't help!
we had to rent hotel rooms nearby, for days and weeks at a time to do our testing. our corporate headquarters just did not have good cellphone reception (pretty much across the board but tmo was the most useless). if I got an EDGE connection, I felt lucky (sigh). if you can imagine a cell phone company not doing a check of the RF reachability before picking a new HQ, maybe its good for a laugh or two right now. was not very funny at the time, though.
I do like the unlimited plan and no-contract of tmo but letting giants merge to become bigger giants NEVER helps the consumer.
if this is allowed - and we all know it will be - its further proof of the utter detachment of those who make the laws and rules from those who are forced to live under them.
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"It is now safe to switch off your computer."
The T-mobile that sprint wants to buy is "T-Mobile US", the T-Mobile that is trading stakes is Deutsche Telekom and their T-Mobile International AG holding company.
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.
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
CHOICE: 2 bowls of candy, and 2 bowls of steaming dog crap, isn't a lot of "consumer choice". If a merger turns that into 3 bowls of candy, then consumers will have MORE choice as a result of the merger. That's a big "IF," but both outcomes are possible.
PRICES: While prices could rise a bit, AT&T and Verizon are both desperate to get a foothold in the prepaid cellular market. To do so, they have dirt-cheap service plans that are nearly competitive with Sprint and T-Mobile, without that whole lousy coverage issue. I don't see how SprinTMobile will be able to raise their prices much, without losing all their customers to pre-paid plans from the big two.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
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?
Now, if they had to give back both spectrum and exclusive rights to some of their infrastructure so that competitors can come in, that would be a fix that might work.
This is the thing I think people don't understand about the US cellular industry - you can't try to "create" a new competitor because it will fail. The reason is that cellular business is all about scale - precisely the thing that is driving the T-Mo/Sprint acquistion. Fundamentally, you need to have the same 30-40K+ cell towers to cover most of the population centers in the US whether you have one million users, 10 million, or 100 million. When you are distributing that same infrastructure costs across fewer users, your economics are far worse than the big guys and it's very very difficult to compete. Additionally, size brings additional benefits such as more clout when negotiating device costs from Apple or Samsung, better deals with network infrastructure providers, etc. Scale is everything.
So the problem with bringing in a new competitor is that it will take them many years to even get to a point equivalent to today's T-Mobile, which is struggling to make ends meet with a national network supporting 25 million users. Even if you subsidized out of taxpayer pockets the spectrum and some of the infrastructure, you'd just be propping up a company for the sake of competition that would have to merge/get bought by someone else eventually or remain uncompetitive on pricing and probably go out of business.
It's unfortunate for a variety of reasons... but when you have businesses with a high financial barrier to entry and a model that grows efficiency with scale, economically speaking you will always see a trend towards consolidation to the minimum number of viable players.
"95% of all Slashdot
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...
Right now Deutsche Telekom currently owns 67% of T-mobile USA.
After the deal, Deutsche Telekom will have $32 billion and 15% of the merged company.
Why is this hard?
Because no one fucking mentioned T-Mobile USA, or Deutsche Telekom, or T-Mobile International AG, or T-Mobile US Inc.which is the actual fucking name of the piece of T-Mobile in question.