T-Mobile Lays Off 1,900 Workers, AT&T Tells FCC "Told ya so"
March 23, 2012 4:30 PM
comment(s) - last by
AT&T still isn't done badmouthing the FCC
Yesterday, T-Mobile made the decision to axe 1,900 workers in the U.S. Most of the layoffs will come from call centers located in Pennsylvania, Florida, Texas, Kansas, Colorado, and Oregon.
T-Mobile USA CEO and President Philipp Humm explained, "These are not easy steps to take — or, I know, to read. We must address our business realities so we can focus on getting T-Mobile back to growth."
AT&T, which has a
serious axe to grind
following the failure of its acquisition of T-Mobile, took the opportunity to kick some mud in the face of the Federal Communications Commission (FCC). Jim Cicconi, AT&T's Senior Executive Vice President of External and Legislative Affairs, made it clear that had the merger gone through, the jobs at T-Mobile's call centers would have been preserved.
"Only a few months ago AT&T promised to preserve these very same call centers and jobs if our merger was approved," Cicconi chided. "We also predicted that if the merger failed, T-Mobile would be forced into major layoffs."
Cicconi didn't stop there, however. He continued his rant against the FCC and didn't hold back any punches:
The FCC argued that the merger would cost jobs, not preserve them, and that rejecting it would save jobs. In short, the FCC said they were right, we were wrong, and did so in an aggressive and adamant way.
Rarely are a regulatory agency’s predictive judgments proven so wrong so fast. But for the government’s decision, centers now being closed would be staying open, workers now facing layoffs would have job guarantees, and communities facing turmoil would have security.
So what’s the lesson here? For one thing, it’s a reminder of why “regulatory humility” should be more than a slogan. The FCC may consider itself an expert agency on telecom, but it is not omniscient. And when it ventures far afield from technical issues, and into judgments about employment or predictions about business decisions, it has often been wildly wrong. The other lesson is even more important, and should be sobering. It is a reminder that in government, as in life, decisions have consequences.
It's understandable why AT&T is still fuming mad over the loss of T-Mobile. The company had to pay a $4 billion USD "breakup fee" when it
decided to walk away from the table
after the FCC made it clear that the acquisition wouldn't be approved. For its part, T-Mobile reported that it
lost 700,000 customers in Q4 2011
. Philipp blamed the lost of customers on its inability to obtain Apple's popular iPhone 4S for its network.
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RE: Not Bloody Likely
3/25/2012 1:23:13 AM
Sprint was financially forced into an interesting position. To raise cash, they had to sell off a bunch of their CDMA towers, and license bandwidth off them from the new owners. While this was a negative from the standpoint of a static business, it helped make them technology-agnostic. In many areas, they provide the phone service, while leasing bandwidth on the towers. The type of tower (CDMA, iDEN, or GSM) wouldn't actually matter. And they already have experiencing managing two incompatible networks (CDMA and iDEN). So it wouldn't be inconceivable for them to merge with T-Mobile.
I'm of the opinion that this flexible type of arrangement is where the industry needs to go, and that the current state of carriers owning all three aspects of the business - the phones, the service, and the towers - is maintained only because of locking in customers via multi-year contracts. From a competitive standpoint, I think the optimal state would be for the phone manufacturers to sell the phones, the carriers to sell phone service (and provide loans for subsidized phones), and for tower owners to sell bandwidth to the carriers. You could pick the phone you liked best, the carrier with the plans you liked best, and they could pick the towers with the best service. No more having to compromise on what plan you get in order to have good service, or having to deal with lousy service just to get the phone you want.
If that truly is the direction the industry will go, then Sprint is the furthest along at present.
RE: Not Bloody Likely
3/26/2012 9:48:10 AM
Carriers don't own the phones. They may sell them, but you can activate almost any CDMA phone on Verizon and a hundred thousand iPhone owners have activated those jailbroken devices on T-mobile.
Now I like the idea of the same company owning both towers and switches. That is how networks become reliable. Changing from a roaming partner to an owned tower mid-call is a frequent cause of dropped calls. Imagine that happening every day instead of just on road trips into rural areas? There is also no guarantee of service feature compatibility since 3rd party tower owners generally don't keep their equipment up to date. Service would be terrible without carrier imposing their standards on the equipment that actually signals the phones. 3rd party tower owners don't install battery backups and generators too, so you can no longer expect service at all during power outages.
I agree on the exclusive handset contracts, but as we saw with iPhone - they can be critical to a carrier's marketing.
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