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Failure of Sprint/T-Mobile Merger Means a Missed Chance To Save $30B (kansascity.com)
UPDATE (11/5/17): Sprint and T-Mobile confirmed Saturday that they've ended their merger talks, saying they were "unable to find mutually agreeable terms." The Kansas City Star reports that the failure "means shareholders of the two companies gave up $30 billion or more in cost savings that their managements had expected a merger to generate.
"One combined wireless company would have needed to invest less in its network than the two competing companies spend separately... Absent a merger, Sprint now faces a highly competitive marketplace as the smallest national player and with a more aggressive rival in T-Mobile."
Several news outlets had already reported on Monday that Japan's conglomerate SoftBank, which owns Sprint, has pulled the plug on a proposed merger between the two carriers. From a report: SoftBank will reportedly propose ending merger talks with T-Mobile parent company Deutsche Telekom as soon as Tuesday, October 31st. That's according to Nikkei, which says that SoftBank wants to end merger talks due to "a failure to agree on ownership of the combined entity." It's said that Deutsche Telekom insisted on a controlling stake of the combined T-Mobile-Sprint, and that some people at SoftBank were okay with that as long as SoftBank had some sort of influence. However, SoftBank's board recently decided that it wouldn't give up control, and today it decided that it wants to call off the merger talks.
Last Monday Sprint and T-Mobile shares both fell immediately following the media reports.
"One combined wireless company would have needed to invest less in its network than the two competing companies spend separately... Absent a merger, Sprint now faces a highly competitive marketplace as the smallest national player and with a more aggressive rival in T-Mobile."
Several news outlets had already reported on Monday that Japan's conglomerate SoftBank, which owns Sprint, has pulled the plug on a proposed merger between the two carriers. From a report: SoftBank will reportedly propose ending merger talks with T-Mobile parent company Deutsche Telekom as soon as Tuesday, October 31st. That's according to Nikkei, which says that SoftBank wants to end merger talks due to "a failure to agree on ownership of the combined entity." It's said that Deutsche Telekom insisted on a controlling stake of the combined T-Mobile-Sprint, and that some people at SoftBank were okay with that as long as SoftBank had some sort of influence. However, SoftBank's board recently decided that it wouldn't give up control, and today it decided that it wants to call off the merger talks.
Last Monday Sprint and T-Mobile shares both fell immediately following the media reports.
I've had top notch service from T-Mobile. Service beyond what is expected from a carrier.
Sprint, on the other hand... meh. They just never have done much to make themselves stand out, and tossed technologies that were cool (iDEN, WiMAX). Heck, they were demanding $1500-$2000 from Windows Mobile app developers for a signing cert so apps could work on their devices.
If T-mobile came on top, great. If Sprint "leadership" did... I'd probably wind up fleeing to a MVNO.
If Spring merged with T-Mobile, it would fade into mediocrity. Now that they aren't, Sprint will fade into mediocrity.
As long as they can, while they plan their exits to remote tropical islands.
Can we expect Sprint to finally get the **** off their laurels, and actually get back to improving their network infrastructure?
No... I didn't really think so, either. <sigh>
Market diversity is good for the people.
I'm glad to see these corporations maintain their separation and continue to compete.
Bye Felicia!
only a blackberry that fits up his ass
The Japanese stakeholders were unwilling to start wearing pink shirts.
#DeleteChrome
on Sprint's part, about who the real loser in this pairing is.
Management/merger failures is how they got into the position they are now. Why the hell would T-Mobile, who have only been doing gangbusters-better the last five years, let Sprint take the wheel of the combined company?
"These investigations have had no leaks, which 'kinda implies that there is no substance."
Why don't you move to Hollywood and get molested, penis breath.
Heck, T-Mobile could only go downhill if the merger went throw.
Deutsche Telekom (Parent company of T-Mobile USoA) has been trying to get rid of T-Mobile USoA for years (lustres, maybe even decades)...
That's why these news about mergers in the Cell-Comm industry always involves T-Mobile as One of the actors.
And while is true that the company went public when it reverse-merged with MetroPCS, the germans have not been able to get rid of it selling shares in the Opent Market.
At this time, the Germans should realize that this repeated efforts to sell T-Mobile to another Cell-Comm concern is not the path forward, and instead knock the Door of Spectrum/charter or Comcast and merge (with one of them, although Comcas and Charter have a strange agreement regarding Cell-Com services), to be a Wireless+Cable+Wireline Concern. To sweeten the deal, they may make a pure stock merger. This will dilute ownership for them, allowing for an easier selling of shares in the open market.
And now, a little MBA FanFic:
1.) A meger between T-Mobile and a Big CableCo will force Sprint to merge with the other.
2.) The merged entity resulting from Charter will, sooner or later, knock on the door of CBS/Viacom to Acquire the CW + some other table scraps.
3.) The two merged entities will race to merge/acquire Dish.
At that point, we will end up 4 comparable giants in the Wireless+Wireline+Cable+DTH+Content, but instead of being equal in every dimension, will be bigger in some, and smaller in others...
Then we would see a little bit more competition from these oligopolies... Trying to leverage their strengths in one dimension to capture customers to reinforce their weaker dimensions...
One can only hope.
*** Suerte a todos y Feliz dia!
Sprint sucks. Glad that didn't happen.
Sprint is differentiated than AT&T, Verizon, and T-Mobile. To provide a list comparing the differences doesn't belong in this post. My point is that Sprint is the best option for some subscribers than other subscribers. They have a 'better' model when 'all' the options are considered and depending on what is important to the subscriber: Public Static IP Addresses are a monthly subscription and doesn't require a first time fee or one time fee or a minimum number of lines on the account (I'd feel better paying monthly for it, because a business has to renew those IP-address-blocks from ARIN at least yearly in an auction) and no data while talking on the phone (there are workarounds, and some prefer to only talk on the phone, not talk and browse/send MMS). It may not be the most successful/popular model, and perhaps that's why Sprint is the smallest (But the smallest comprised of whom?)...
Japan's Softbank was going for Go-go Fonachu, while Deutsche Telekom wanted Axis Reichsfone,
and they just could not agree to a compromise.
I've been an unwilling Sprint customer twice.
The first time, I got a Nextel because I worked for a construction-trades company. The PTT feature was the shit. Nobody could match it then, and everyone has dropped it since. Sprint bought Nextel and made it suck. I eventually switched to AT&T to get an iPhone (back when it was AT&T exclusive). The worst part was having to wait nearly 8 months for the contract to run out. Ugh.
Fast forward a few years, and I had switched away from AT&T to US Cellular. (Also got rid of the iPhone in favor of Windows Mobile 6.5 and then Android. Yes, both are better than iOS. And I eventually went back to Windows Mobile once W10M came out.) So Sprint buys out a handful of US Cellular markets in the midwest, including the one I'm in. They gave us a date when everything would switch over to Sprint, with a big rah-rah about how much better it would be and how unicorns would fly out our asses or some shit. That date came, and I suddenly had no signal, no roaming, nothing. The next day, I switched to T-Mobile.
Sprint can go fuck themselves in the ass with a rusty grill brush covered in hepatitis juice.
I legally changed my name to Hognoxious Turkeydance Mightymartian. As soon as I did so, my IQ dropped to around 50. There is both correlation and causation present.
Saving the $30 billion would put more money in the pockets of the wealthy. Why do the wealthy need more money? I don't have as much money and I'm incredibly stupid. I need the money more than they do.
My name is Hognoxious Mightymartian and I approve this message.
actually, the owner of Sprint, SoftBank. see it here: https://www.dramafever.com/new...
The $30B "cost savings" in the form of paring "redundant staff" would've been passed on to shareholders, and monthly subscription fees would be increased because there would one less major network provider. The departing executives would get their golden parachutes, and senior management of the combined company would get even more massive compensation packages.
None of this would be good news for wireless subscribers, or rank and file employees of either of the two companies. Even subscribers of competing services like Verizon and AT&T could see their bills increase.
I like my current level of service. I know it is not perfect, especially when I go to vacations to remote areas, however I get 95% of what I need at about half the price of the competition. Among the competition, AT&T seems to provide similar service with higher price, and Verizon seems to offer better service with higher price. Sprint always seemed the distant last with worse service, with worse price (compared to what I'm getting right now).
There was some potential in T-Mobile absorbing Sprint and repurpose the spectrum for better combined service in the long run. However SoftBank seems to have a different idea in this merger. I would not want T-Mobile resources used by Sprint to make a worse combination of the two (remember Sprint is losing money, and the way they can make, if they took over TMobile, would be giving less service for higher price).
Legere is a total troll. T-mobile is worth the comedic value as much as the actual service.
Nobody should trust the proven liars and sell-outs at AT&T / Verizon. At least with T-mobile, your carrier is slightly less untrustworthy and the CEO gives you lots of comic relief.
Why does the word "save" so often translate into delivering less with less?
Which lies more in the "skimp" territory, if we're being semantic.
If they cannot give up control then ending the merger was the right thing to do.
Any quantified cost savings are just made-up numbers, and that's beyond their assumption that internal politics can be overcome to actually realize efficiencies.
The real reason any company wants to merge is so the execs get hefty bonuses and become personally wealthier.
The key word being "expected" to save.
All mergers are accompanied with glorified accounts of how much synergy will be realized. I've been through several mergers, the last two at high management positions. In reality, only a small part of that synergy is ever realized, because the consultants never dig deep enough to figure out that no, you will not be able to merge your CMS systems because A doesn't offer this critically important feature that B offers. So you also can't save half of the IT personal, or maintenance cost. And no, that one call center can't handle all your requests without extensive training and tool changes. And no, those three managers are not superfluous they actually have all the really important information in their heads. And so on and so forth.
In a good merger, a fraction of the projected savings is actually realised. In a typical merger, next to nothing. The main purpose is to consolidate market share and get rid of a competitor.
Assorted stuff I do sometimes: Lemuria.org
A $30bn number does not come about by one-time costs like research and development. And infrastructure duplication can be fixed by negotiating cross use. Savings of that amount can only be achieved by delivering less per end customer, and that can only be driving revenue when there is a lack of competition.
If those numbers were not just a fantasy pulled out of someone's smartphone charger, the intent was to further decrease the value delivered to U.S. customers while leaving them without alternative.
T-Mobile rules for csat. AT&T for coverage (US and Europe).
Sprint none of the above.
As I've moved most of my families lines to T-Mobile, I for one am happy the merger failed. Sprint would have sucked the soul out of T-Mobile.
Ya sure, this is one data point, but I travel a lot -120,000 miles last year - so have a decent sampling of coverage.
My wife has Sprint (typical plan). I have T-Mobile ("prepaid", but it's unlimited and I pay once a month with automatic payments, so whatever).
Her service costs between two and three times as much as mine (closer to three).
She used to be able to say that she had a signal inside large buildings, and I sometimes didn't. I got a new phone recently that needed a smaller SIM card, and now I have great service inside such buildings too. No more advantage to Sprint.
Both have clunky websites, though to be fair T-mobile's site never got in a crazy login loop where it wouldn't believe a password had been changed. For months. Sprint's did.
Sprint costs almost three times as much, and offers no advantages that I can see. So I can't see anything good coming of a merger. (Unless, of course, Sprint becomes more open, better, and cheaper. Not holding my breath.)
*whoosh*
deleting the extra space after periods so i can stay relevant, yeah.
You're feeding them, They will only multiply.
deleting the extra space after periods so i can stay relevant, yeah.
BTW, if you want to use a combined Sprint/T-Mobile, you could just sign up for Project Fi.