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“The merger would result in a wireless industry dominated overwhelmingly by two vertically-integrated companies"

The rumors persisted for months -- years, even. We reported on them as recently as March 8: "Report: Sprint in Talks to Acquire T-Mobile USA". Then, over the weekend, all previous speculations and ruminations were put to rest when it was announced that AT&T -- not Sprint -- was the most handsome suitor for the Magenta carrier 

Right about now, Sprint must be feeling like the nerdy boy who's been mustering the courage to ask out his crush -- a cheerleader, naturally, despite the pair's evident incompatibility -- only to learn that the object of his affection had been courted by the backup quarterback of the varsity football team over the weekend.

So what's Sprint going to do about it? Well, in this case, it means issuing a statement urging the Department of Justice (DOJ) and the FCC to consider the competition.

An AT&T/T-Mobile merger "would alter dramatically the structure of the communications industry,” Sprint said in a statement cited on Ina Fried's Mobilized blog. “AT&T and Verizon are already by far the largest wireless providers. A combined AT&T and T-Mobile would be almost three times the size of Sprint, the third largest wireless competitor.

“If approved, the merger would result in a wireless industry dominated overwhelmingly by two vertically-integrated companies that control almost 80% of the US wireless post-paid market, as well as the availability and price of key inputs such as backhaul and access needed by other wireless companies to compete,” Sprint said. “The DOJ and the FCC must decide if this transaction is in the best interest of consumers and the US economy overall, and determine if innovation and robust competition would be impacted adversely and by this dramatic change in the structure of the industry.”

AT&T told Mobilized that it wasn't worried about getting approval. “Today when you look across the top 20 markets in the country, 18 of those markets have five or more competitors, and when you look across the entire country, the majority of the country’s markets have five or more competitors,” AT&T President and mobile unit CEO Ralph De La Vega told Mobilized. “I think if the criteria that has been used in the past is used against this merger, I think the appropriate authorities will find there will still be plenty of competition left."

In Washington, Sen. Jay Rockefeller (D-W.Va) promised to look into the merger with his Commerce Committee while urging regulators to "leave no stone unturned" in their scrutiny of the merger. “With every passing day, wireless services are becoming more and more important to the way we communicate,” he said in a statement. “So it is absolutely essential that both the Department of Justice and the FCC leave no stone unturned in determining what the impact of this combination is on the American people.”

If the deal fails, AT&T could be stuck with a $3-billion debt to T-Mobile. It could also be forced to hand over spectrum and other considerations, according to Mobilized



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Boooo
By RjBass on 3/21/2011 9:12:50 AM , Rating: 3
I have been an AT&T customer for several years now and each new year I get more and more fed up with their service and prices. They regulate everything, and cripple my phones with their bloatware and heavy usage restrictions. I have been looking to switch to T-Mobile for a while now, but it looks like I will being going back to Sprint. Maybe when my contract is up I can instead go to Cricket. They seem to be following in T-Mobiles footsteps with true unlimited plans and less BS restrictions.




RE: Boooo
By Ammohunt on 3/21/2011 2:51:48 PM , Rating: 3
tell me about it! i couldn't drop AT&T as fast as they would my calls! I of course moved to T-Mobile DOH! back to crappy service and dropped calls!(wonder if i can get out of my contract and move to Verizon)


RE: Boooo
By gorehound on 3/21/2011 4:32:19 PM , Rating: 3
I dropped ATT years back and hope I will never find myself in the position of having to go back to them.

this merger is BS and creates a monopoly.this government better not bend over to ATT.


Regulators dropped the ball
By Da W on 3/21/2011 9:25:45 AM , Rating: 2
I used to work at the canadian competition autority. I can tell you that except for Europe, praticaly NO merger was ever countered for the past 2 decades and the north american economy has greatly suffered because of that.

When you think of it, WHY would AT&T want to buy T-Mobile at a 20% premium over current market value? WHY? Only because it will mean less competition, and proportionally more market power for AT&T. There's is no other reason behind it, it's definitly not a simple "value" deal like Warren Buffet would do.

Here in Canada we gave the okay for Rogers to swalow then fierce small and nibble competitor Fido. Then we gave the okay for Bell to eat Virgin Mobile. I know Telus rents Bell towers. And we even let pass a joint venture between Rogers and Bell so they can co-own their 3G technology (HSPA). The end result is that you can shop anywhere, you will find ONE price in canada, and it's 50 bucks for 100minutes and 500MB or 65$ for 200min and 1GB. You will choose your carrier by the phone you wish to have, which are more or less all 1Ghz qualcomm snapdragon with a 800X640 Amoled screen and a 5MPx camera...




RE: Regulators dropped the ball
By DanNeely on 3/21/2011 11:10:16 AM , Rating: 2
Most buyout's are done for above market value because the buyer thinks they're getting a good deal/it's worth more to them than the current owners, so I don't think you can use the fact to support your conclusion however right it is.


RE: Regulators dropped the ball
By Da W on 3/21/2011 3:21:07 PM , Rating: 2
Yes, but in this case who are making the bid? Only other carriers, because, as you say, the deal is worth more to them than the current owners. Where do this increased value come from, if not increased market power? This is not a case of a conglemerate buying an undervalued asset like most M&A are.


By jah1subs on 3/21/2011 9:40:51 AM , Rating: 2
More concentration of economic power in the United States :-(( From oligopoly to duopoly. Hope everyone is keeping track of the terminology.

Everyone talks about the benefits of the perfect competition form of economic markets, but it is a non-starter in so many aspects of the American economy, especially technology based markets with high costs of entry.




By Denigrate on 3/21/2011 9:42:38 AM , Rating: 2
T-Mobile won't allow me to refill my prepaid phone this morning. Tried 3 different cards all with the same result. I'm really torqued at this point.




Out of touch
By Jalek on 3/21/2011 10:46:04 PM , Rating: 2
Calling on a regulatory agency to consider consumer interests? That's not today's America, corporate interests and ways to collude with industry to squeeze the remaining money from consumers is all government exists for.

Who do they think our government works for, the people? BAHAHAHA




We need a government cell phone provider.
By quiksilvr on 3/21/11, Rating: -1
RE: We need a government cell phone provider.
By GeekWithFire on 3/21/2011 9:40:37 AM , Rating: 4
I don't understand your logic. Because the government failed horribly in a no-tech market that previously had no competition, you think they can succeed in a high tech market that is already booming? The only thing it would do is show how well the big boys are doing their jobs. All businesses have flaws, but in a level playing field capitalism works every time it is tried.


RE: We need a government cell phone provider.
By Uncle on 3/21/2011 7:01:26 PM , Rating: 1
I guess you were at the head of the parade shouting and praising the government when the government handed out all the welfare cheques (bailouts) to the capitalist because its a system that works.


By torpor on 3/22/2011 2:49:07 PM , Rating: 2
The bailouts weren't about preserving rich companies or CEOs.

Let's see...bailing out the banks protected one of the largest contributors in the last presidental election - Citibank. Forcing the other banks (most of whom did not need help) to take "help" sowed the seeds of control and kept the public from seeing which banks had real trouble and which did not. And FYI, the government has made money on the deal as of right now. So if it makes you feel better, consider it a bonus tax on big business, because that's how it ended up.

Bailing out GM and Chrysler was a favor to the unions, which was another of the big donors. You see, if GM and Chrysler went bankrupt, the union contracts would be dissolved and remade in a sane, sustainable way. Avoiding bankruptcy court prevented that outcome, and ended up with the UAW owning 17% of GM and 65% of Chrysler, effectively ending any chance of union labor costs coming down to internationally-sane levels.

The bailouts were actually, therefore, communism at its worst. Failures in the marketplace need to be allowed to fail - it would have made unsustainable jobs sustainable via the bankruptcy process, and would have been the keystone to a rebuilding of the greater Detroit area.

Instead, it'll be more of the same, but this time with no end in sight. Yay government.


RE: We need a government cell phone provider.
By theapparition on 3/21/2011 9:41:59 AM , Rating: 2
What a horrible idea.

Governments are incapable of managing any entity cost effectively. Do you really think more government is the answer?


By AEvangel on 3/21/2011 10:12:19 AM , Rating: 2
This merger will pass simply cause for the Govt it's easier to deal with two major players when you need access to our phone lines then if you have multiple carriers with different networks.

All the other competition the CEO of At&t talks about is more then likely leasing the service from one of the current four companies. so their really no competition at all.


RE: We need a government cell phone provider.
By MrBlastman on 3/21/2011 11:19:16 AM , Rating: 2
A Government run-phone company is a ludicrous idea. They are here to "govern," not supply us utility services. I don't want the Government to have more power than they already do--including the direct handling of our communications and the ability to cut us off if we don't pay our taxes.

As for Sprint--sorry guys, you screwed the pooch on this one. Ya'll really let me down this time. I was counting on Sprint finally making a turnaround but, alas, I don't think it is to be. They might as well go out and commit hari-kari over this one. Here, I'll make it easier.

*hands Sprint executives a Wakizashi*

You might question why I handed them only one. Well, it is simple. I want each consecutive executive to realize the complete blunder they have made. As the blood scabs on the blade, it will make it harder for each following one to commit the deed. Those who are the least brave, will die the most horrible death.

Sprint has already shown a lack of bravery. They should face pain like the failure of their latest actions will be causing the thousands employed at Sprint eventually.


RE: We need a government cell phone provider.
By mcnabney on 3/21/2011 1:33:05 PM , Rating: 3
This merger is the best possible option for Sprint.

They don't have to pay for T-Mobile, but they should get a lot of their customers since they will remain as the only large value wireless carrier. The T-mobile customers will stay with AT&T only as long as they can keep their low service prices and receive contractless discounts. If price matters most, the customers will go to Sprint/Boost, MetroPCS, Cricket, and Virgin.


RE: We need a government cell phone provider.
By MrBlastman on 3/21/2011 2:18:47 PM , Rating: 2
I don't think you should be making those assumptions with such great a conviction.

For one, you are completely assuming there will be a tremendous flocking from T-Mobile to Sprint--which, is solely based on the assumption people use T-Mobile for price alone. This is Sprint's only competitive measure. They can't compete on anything else. Their network is inferior and their customer service is completely inferior to T-Mobile. You can't assume people are utterly shallow to consider only price when making a two-year commitment.

Many T-Mobile people might be in for a shock though, when they find out AT&T's customer service is far worse than what they are used to, if AT&T merges them in completely rather than keeping them as a subsidiary. I will say that the T-Mobile customers will more than likely shop around rather than just go to Sprint. I also know that MetroPCS and Virgin have horrible coverage outside of major cities.

No, this news truly is terrible for T-Mobile customers. It's just outright bad. There's nothing in it to benefit you if you're on T-Mobile. For Sprint, it was their last major chance to do something. They really screwed up as T-Mobile would have solved their one big flaw which is customer service, and would have enhanced their network a bit also.

I think Sprint stands to gain business from this, but how much, I don't think any of us can say for sure. Sprint isn't dead in the water, though, but this is a major setback for sure. The one gleaming positive about the company, despite them losing money every quarter, is their positive cash flow.


RE: We need a government cell phone provider.
By belawrence on 3/21/2011 3:04:33 PM , Rating: 2
Sprint's network is inferior to T-mobile? Where? Not where I work/live. My employer even restricted any employee from using TMo for a work-reimbursed phone due to it not being, and I quote, "mission critical ready in parts of the country." Customer service is inferior? You do realize they're being bought by AT&T, right? AT&T drove me into the arms of Sprint due to their outright horrible customer no-service.


By MrBlastman on 3/21/2011 4:29:38 PM , Rating: 2
quote:
Customer service is inferior? You do realize they're being bought by AT&T, right?


Reading comprehension. It's right above your post in my previous post...

quote:
Many T-Mobile people might be in for a shock though, when they find out AT&T's customer service is far worse than what they are used to, if AT&T merges them in completely rather than keeping them as a subsidiary.


Also, solely based on anecdotal evidence, I can confirm from my own small polling of people that Sprint has an inferior network. I'm not sure whether this holds up around the country as a whole, just in my regional area.


By sweatshopking on 3/21/2011 8:04:18 PM , Rating: 2
Many studies have shown that a well run public utility can do a much better job than private. that was why they were all made public to begin with. you're just a silly man, who writes silly posts, about silly blades. I'm happy you're so passionate, but it seems silly.


RE: We need a government cell phone provider.
By MDGeek on 3/21/2011 10:19:10 AM , Rating: 2
I hope your suggestion for Government to get involved is in the area of transparent regulation? If so, I am all for it.


By Jalek on 3/22/2011 6:12:01 AM , Rating: 2
Regulation isn't necessarily all bad, systems with uncontrolled markets historically don't foster competition.

Having it open where all companies are held to the same standard, and not just to the standard their lobbyists can afford, would make a lot of difference. Trust busting after the fact isn't the most efficient approach, but the one that logically follows after decades of mergers and buyouts.


"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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