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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.
If Spring merged with T-Mobile, it would fade into mediocrity. Now that they aren't, Sprint will fade into mediocrity.
Market diversity is good for the people.
I'm glad to see these corporations maintain their separation and continue to compete.
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?
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!
Did you ever use wimax? I did, and it fucking sucked. I had their service beginning in 2003 and ended it in 2013 because the quality of service kept declining. Hell, I was on the phone with Sprint support telling them that I'm always getting dropped calls, and they told me that my dropped call rate was zero percent...but then the call dropped right afterwards. I had to use the forced roaming trick to get them to drop my contract, then I switched to TMobile... Massive difference in call quality and speed, and this was before they even did the uncarrier thing and became disruptive. T-Mobiles hspa+ was so much better than Sprint's wimax in terms of speed, and it didn't drain my battery while using it.
Sprint has been all about increasing ARPU and decreasing churn, but not overall subscribers or network quality for many years now. At least, that's what they've had on their financial statements.
When you read between the lines, what this means is that they're doing whatever they can to nickel and dime customers, scale back discounts, etc.
Actually strike what I said in that previous reply...Sprint has been saying that big upgrades are right around the corner, usually placing 3-6 month timespans, for the past 12 years. They have a tower upgrade map that always shows these short timespans, ranging anywhere from a month or a year, where they say the tower is being upgraded. Meanwhile, that entire time, the service kept getting worse and worse.
Oh and: https://www.cnet.com/news/spri...
It's well past that two years, and two years before that, Sprint said "pardon our dust":
http://www.cnn.com/2013/11/21/...
Seriously, this is nothing new with Sprint. I was with them for a very long time before I got tired of their shit, especially when they blatantly lied to me saying that my dropped call rate was 0%, and during that same call I got dropped, the rep actually called me back, I said WTF, and she said "I don't know what that was."
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've had top notch service from T-Mobile. Service beyond what is expected from a carrier.....If T-mobile came on top, great. If Sprint "leadership" did... I'd probably wind up fleeing to a MVNO.
The idea was that T-Mobile would be running the show after merger. The sticking point was how much SoftBank would get paid in addition to the 40% or so of the combined company they’d still own. T-Mobile didn’t want to pay much. SoftBank should have taken what they could get while the getting was good. Sprint is circling the drain.
Not only is it circling the drain, they're not even trying.
They didn't buy any spectrum last auction, so they can't really build out and compete.
I suspect TMobile ends up buying them after they're reduced to about the size of Metro PCS.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
More competition is stupid my friend.
More players could be a good thing, but competition when it comes to these things is absolutely stupid.
Carrier A - "Hey look... we put up 40 new LTE POPs in this urban area!"
Carrier B - "Hey look... we put up 50 new LTE POPs in the same urban area!"
Carrier C - "Hey look... we put up 110 new LTE POPs in the same urban area!!! We win!!!"
Customer - "Hey look, I have great coverage on all 3 of my phones from Carrier A, B, and C at my office... but I had to walk 3 miles to get signal when my tire went flat on the Interstate driving from NYC to D.C. last week. Too bad the carriers don't share the load to cover outside the cities. It's strange how we never have coverage problems when traveling in Europe".
If these players were to work together to actually build their networks out and regulation were put in place giving fair access at fair prices to carrier over carrier on the common network, then American mobile coverage wouldn't suck so bad... and it REALLY REALLY does.
I just took a 1200 person company in Europe and convinced them to stop investing in wireless networking at the office and to invest in VPN and LTE modems or LTE enabled laptops instead. We did the cost calculation and realized that :
a) The cost of maintaining a modern wireless and telephone network at the office was 3 times more expensive than simply using LTE.
b) LTE has a MUCH better chance of working everywhere.
c) LTE has actual quality of service
I can go on. But this was headquartered in a tiny little village with like 5000 people with an hour drive to the nearest highway and a little airport with 3 flights a day. And the LTE coverage there works everywhere for a 50km radius at least and 100% along the roads. And this is because competition is BAD for telephone networks.
We build our networks out.
We charge our frienemies to use our networks
We send them an itemized bill
They send us an itemized bill
If we see that we're paying them too much in a specific area, we build our own towers there
If it would cost more to build towers than to simply pay them, then we simply pay them.
The government forces us to collaborate to have a minimum 95% service coverage nationwide.
We share the costs with our frienemies to cover as many areas as possible with the least amount of cost.
We get support from the national military because they need to practice demolition, so they lay lots of fiber to make it a little productive.. we then buy fiber from them instead of going mesh.
Competition isn't good. Cooperation with regulation is good.
But if you think it's better to have a bunch of shitty carriers competing instead of a bunch of great carriers cooperating... I suppose that's fine...
BTW... do you watch sports too? I really really really like sports... they tend to make it so there are places like stadiums and bars or at least sofas at home which keep the people who don't believe in cooperation out of the way of people who believe in working together for a few hours here and there.