Big Telecom: Terms Set For Sprint To Buy T-Mobile For $32B 158
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.
Re:I would allow them to merge allright (Score:1, Interesting)
The thing is, that wouldn't really help. If they give up spectrum, it'll just be bought out by AT&T or Verizon, either through themselves or through shell corporations. 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.
Re:Less consumer choice, higher prices ahead (Score:5, Interesting)
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.
Re:Less consumer choice, higher prices ahead (Score:3, Interesting)
Naw, I'd put Sprint as dead last both from my friends, coworkers and family with T-mobile slightly ahead of them them in terms of customer service. I had Sprint for years, disconnected calls, no network access, slow network and then 3 years ago I cancelled. After 6 years with them they sent a $400 nasty gram saying I had 10 days to pay or they'd turn it over to collections even though my bill was current. The $400 was for a smartphone and early termination of that. I then went with T-Mobile who I'd been with before Sprint. When T-Mobile filed for bankruptcy it really went south from there. Although the network performance was better customer service sucked badly, so instead of dealing with that I switched to Simple Mobile which uses T-Mobile's network and I don't have all the bullshit. So consumers will have the worst coverage unless your in major metro areas and with spending $32 billion for T-Mobile I doubt Sprint will have the resources to build out the network further, much like when they acquired Nextel.
Verizon's problem is, well they're Verizon and you're not. Their terms and conditions/business practices are recognized as the worst but their customer service and network are top notch. For my business accounts I use Verizon, personal stuff SimpleMobile.
Re:Less consumer choice, higher prices ahead (Score:5, Interesting)
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.
Re:Less consumer choice, higher prices ahead (Score:0, Interesting)
You could try reading the details. [jdpower.com]
Sprint and T-Mobile have bad service, there merge will be a composite of horrible service that makes everyone else glad they aren't using Sprint-Mobile.
Or here's another place explaining an older JD poll [scambook.com]
Anybody remeber Nextel? (Score:5, Interesting)
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.
Economics of a triopoly? (Score:4, Interesting)
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?
Re:I don't get it (Score:3, Interesting)
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.