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Would a T-Mobile-Sprint Merger Hurt Consumers? (dslreports.com)
Following a report from Reuters claiming T-Mobile is close to agreeing on a deal to merge with Sprint, an anonymous Slashdot reader shares a report from DSLReports arguing how such a merger would remain "a very bad deal for consumers": The Sprint-T-Mobile merger could prove problematic for not only wireless prices, but the recent resurgence in unlimited data plans. While wireless carriers still often engage in theatrical non-price competition more often than not, the government's decision to block AT&T's acquisition of T-Mobile several years ago helped spur an unprecedented period of competition in wireless (something large ISPs and their policy armies like to ignore). The end result was a brasher and more competitive T-Mobile, who lead the way on a wave of improvements in the sector culminating most recently in the return of simpler, easier unlimited data plans. The government's decision to block Sprint from acquiring T-Mobile helped keep that competition intact, something large ISPs and their policy folk would similarly like you to forget. As a result, T-Mobile has added more customers per quarter than any other wireless carrier for several years running, as the resulting competition put an end to numerous, nasty industry tactics including overcharging for international roaming, to obnoxious fees and long-term contracts. And while the new, combined company will likely still be run by current popular T-Mobile CEO John Legere, the very act of eliminating one of only four major players in the wireless market will indisputably reduce the incentive to more seriously compete on price, and could help reverse the progress the sector has seen in recent years. It's well within reason that this reduced competition could also bring back metered plans and put an end to unlimited data.Wirefly is a good place to compare cell phone plans to see the difference between Sprint and T-Mobile.
Since this essentially will lead to a monopoly or at least an oligopoly situation it will hurt the customers.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
There are two possible counter arguments to the "Fewer competitors = less competition" argument.
The first is that both Sprint and T-Mobile are silo'd, in the public consciousness, with "Cheap and poor quality", in comparison to their other two competitors. The reputation is unfair: T-Mobile is superb right now, and Verizon has always been overrated, concentrating on technical metrics studied in surveys while running a network that ignores critical usability features like call quality and user friendliness.
A merger would make it much easier for T-Mobile to knock down that final block in the public perception about its network. It can point out that it now has the combined coverage of both networks, matching or exceeding their competitors, and has plenty of low frequency spectrum to deal with indoor coverage issues. It would be able to argue that it is higher quality than both AT&T and Verizon on every metric.
The second counter argument is that Sprint is failing. Badly. It's not been profitable in decades. It is being propped up by investor after investor in the hope that one of the big 3 will buy it out. Sprint is going to die, one way or another, and if it doesn't merge with T-Mobile the likely result is that it'll just go bankrupt and the assets will end up split across the big three anyway.
There's a bigger picture here, and while yes, more competitors should equal more competition, two weak competitors in a four player market might not work as well as one strong competitor taking their place against the other two.
You are not alone. This is not normal. None of this is normal.
I guess it's time to retire Betteridge's law.
I think the question is whether the structure of the governance of the resulting organization is such that investors can require them to fuck over customers if such action shown to generate more profit. I've been a customer of both T-Mobile and Virgin Mobile (now wholly owned by Sprint), and it's scary for me when I read that Softbank wants a say in how the resulting company is run.
OTOH, if T-Mobile signal starts originating from the towers used by Sprint, then they'll finally be getting strong enough signal to provide for more than intermittent text messages to my house. I eagerly await the 600 MHz LTE.
What normally happens in Mergers.
You have the larger failing company, and the smaller growing company.
They merge. The fact the larger company (although failing) has more stock of ownership they make the rules, and normally push out the management in the smaller. Thus often killing what caused the smaller company to succeed. So you now have a larger failing company but it will now take longer for it to fail.
Sometimes if the smaller company has enough personality and loyal customer base then they may do the right thing and incorporate the culture that caused growth, with the larger companies increased capital.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Unfortunately the term "The companies first priority should be to the share holders" has been taken out of context.
Back when it was written, Companies would often take the share holders money and use it just to enrich themselves, or will give it away to their church, or other crazy cause, even at the companies expense. So the shareholders were often investing in companies that were killing themselves. With the change of focus to prioritize the shareholder, it means that the company should use their money to invest back into the company, sell more product, higher people to make better products... Even if this is at a cost of a bad quarterly report. However the statement had been taken out of context so now it is about hacking the numbers to keep the shareholders quarterly profits high. At the expense of long term growth.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
GSM initially used TDMA - time division multiple access. Basically each phone took turns talking to the tower. This was terrible for data because each phone took a timeslice of the bandwidth regardless of how much data they had to transmit, or even if they had no data to transmit. If a tower had 50 Mbps of data bandwidth and had 50 phones connected to it, each phone only got about 0.5 Mbps (there is padding at the ends of the timeslices to account for latency due to the phone's distance from the tower and the speed of light).
CDMA (code division multiple access) phones don't use timeslices. They all transmit simultaneously and the tower tells them apart because they're using orthogonal codes. Kinda like writing horizontally and vertically on the same sheet of paper. Your letters overlap, but they're distinct (orthogonal) enough that you can still figure out what the letters are in the direction you're reading. CDMA has no problem with data because each phone sees the other phones as an increase in the noise floor. Since the data bandwidth is the signal to noise ratio, the more phones are transmitting, the higher the noise and the lower the data bandwidth for a single phone. If fewer phones are transmitting, the noise floor drops, and each phone gets more data bandwidth. So in CDMA the data bandwidth available to each phone scales automatically. If there's just one phone using data, it can use all of the tower's 50 Mbps. If there are 50 phones transmitting, each gets 1 Mbps.
CDMA completely destroyed GSM in cellular data performance. Within a year GSM threw in the towel and amended the GSM spec to add UMTS which used wideband CDMA for data. That's why GSM carriers took about a year longer than CDMA carriers to move to 3G data. That's why GSM phones could talk and use data at the same time - they had two different radios, a TDMA radio for voice, a CDMA radio for data. CDMA phones only had a single CDMA radio so couldn't do both at once.
If you'd gotten your wish and the U.S. had gone along with the rest of the world and mandated GSM, CDMA wouldn't have happened and cellular data speeds today would probably be 1-2 Mbps. We would not have LTE because most LTE implementations use OFDMA (orthogonal frequencies instead of orthogonal codes). CDMA was the proof of concept that this crazy "everyone transmits at the same time and we tell them apart by orthogonality" idea actually worked when scaled up to a nationwide cellular network. Without that proof, there would've been little incentive to develop the higher-power consumption OFDMA.
GSM vs CDMA is actually a perfect example of why market competition produces better results than government-mandated standards. (The SIM card is very cool though and I'm glad it got incorporated into LTE.) Government should not be mandating technological standards. It should stick to mandating standardized requirements, and leave it up to the market to come up with the best technologies to meet or exceed those requirements.
Unfortunately the term "The companies first priority should be to the share holders" has been taken out of context. Back when it was written, Companies would often take the share holders money and use it just to enrich themselves, or will give it away to their church, or other crazy cause, even at the companies expense. So the shareholders were often investing in companies that were killing themselves. With the change of focus to prioritize the shareholder, it means that the company should use their money to invest back into the company, sell more product, higher people to make better products... Even if this is at a cost of a bad quarterly report. However the statement had been taken out of context so now it is about hacking the numbers to keep the shareholders quarterly profits high. At the expense of long term growth.
I would mod this up 100 times if I could. Once a company goes public, it's no longer about running a good, solid organization and producing a good product. Instead it becomes maximizing profits at the cost of what made the company attractive in the first place to keep from getting murdered by Wall Street.