AT&T/ T-Mobile merger: What the players say

AT&T/ T-Mobile merger: What the players say

Summary: A lot is riding on the AT&T/T-Mobile merger, especially how it affects consumers so it's worth taking a look at what the players are saying officially about the deal.

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TOPICS: Mobility, Banking, AT&T
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AT&T set the U. S. wireless sector in a tizzy when it announced its intent to purchase rival T-Mobile. The merged operation would create the largest wireless carrier in the U. S., and has far-reaching implications for both consumers and competitors. The government is taking a long, hard look at the ramifications of the merger, and is not expected to simply rubber-stamp the transaction. Sentiment toward the merger is all over the spectrum. Both companies have given official statements about the merger to persuade the government to give its approval. Sprint has also been vocal in the process to give its views about how bad the merger will be for competitors. A lot is riding on this merger, especially how it affects consumers so it's worth taking a look at what the players are saying officially about the deal.

AT&T Public Interest Statement with FCC (April 21, 2011)

  • AT&T is using up its spectrum at an accelerating rate, and the wireless broadband revolution is just beginning. Over the next five years, data usage on AT&T’s network is projected to skyrocket as customers “mobilize” all of their communications activities, from streaming HD video and cloud computing to a range of M2M applications like energy management, fleet tracking, and remote health monitoring. In just the first five-to-seven weeks of 2015, AT&T expects to carry all of the mobile traffic volume it carried during 2010.
  • This merger provides by far the surest, fastest and most efficient solution to that challenge. The network synergies of this transaction will free up new capacity - the functional equivalent of new spectrum - in the many urban, suburban and rural wireless markets where escalating broadband usage is fast consuming existing capacity.
  • This transaction will thus benefit consumers by reducing the number of dropped and blocked calls, increasing data speeds, improving in-building coverage, and dramatically expanding deployment of next-generation mobile technology.

Sprint statement to FCC (June 20, 2011)

“In a new filing before the Federal Communications Commission that will be submitted today, Sprint will present a detailed technical analysis explaining how AT&T could increase its network capacity by more than 600 percent by 2015 without subjecting the country to the anti-competitive and anti-consumer harms associated with its proposed takeover of T-Mobile. This capacity increase could more than meet AT&T's projected data service demand growth through and beyond 2015 for a fraction of the cost of its proposed $39 billion takeover of T-Mobile.

Sprint's filing demonstrates, once again, that AT&T's purported rationale for the proposed merger -- that there is no other way to meet its projected data service demand growth -- is simply unfounded.  AT&T could increase its capacity by developing its warehoused spectrum, accelerating its 4G network buildout, and implementing a more efficient network architecture, just as other wireless carriers around the world are doing today.

AT&T has not, and cannot, demonstrate that its proposed takeover of T-Mobile is in the public interest. That's why tens of thousands of consumers from across the country, Members of Congress, many of the nation’s wireless carriers, new entrants in the wireless industry, a wide range of consumer groups and public interest advocates have joined with Sprint to call upon the government to reject this proposed takeover quickly and decisively.”

T-Mobile statement by Tom Sugrue, VP of Government Affairs (June 21, 2011)

“The opponents of the AT&T-T-Mobile merger have had their final say as part of the FCC’s formal pleading cycle and, not surprisingly, they have failed to offer any credible arguments to support their view that the Commission should deny the transaction. What is surprising, however, is their repeated head-in-the-sand insistence that no spectrum crisis exists. As part of their application, AT&T and T-Mobile provided a compelling showing of their need for more spectrum to continue to provide quality service to customers and roll out new technologies in the future. And the two companies have demonstrated that a combination of their networks and spectrum holdings is by far the best way to solve this problem and ensure improved service and enhanced innovation. The FCC has long acknowledged the harmful consequences of ignoring the spectrum crunch, and we are confident it will approve our proposed market-based solution.”

What's it all mean?

After wading through all of the official paperwork, it's clear AT&T and T-Mobile are hanging their hats on the spectrum crisis angle. The argument is that smartphone data usage is skyrocketing and existing networks are being tapped out at an alarming rate. The merged networks will be the best way to tackle the spectrum crunch, according to the two companies involved.

Sprint is arguing that this is not the case, and that if AT&T would invest in its existing network as have other carriers then the crunch would be better dealt with. The argument is put forth that AT&T is using the spectrum crisis as an excuse to justify creating the largest carrier in the U. S., and to avoid investing in increased network capacity with the acquisition of T-Mobile.

The FCC hasn't given any indication where it might be heading in its anti-trust investigation of the merger, but has stated it is going to be critical of the process. The report that AT&T contributed $3 million to campaigns of House Democrats that have signed a letter supporting the merger shows this may be business as usual in Washington. Consumers are likely the big losers if the merger gets approval, as reduced competition is never a good thing.

What do you think about the proposed merger? Do you think it's good for consumers or the opposite? How about you T-Mobile customers, what do you think will happen to you if the merger goes through?

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Topics: Mobility, Banking, AT&T

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64 comments
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  • RE: AT&T/ T-Mobile merger: What the players say

    If AT&T spectrum is so inadequate that it cannot meet demand less than five years in the future, even if the increase in demand is very large, is T-Mobile sitting on so much spectrum that they can meet their own demand as well as AT&T's increased demand?

    Color me doubtful with regards to this argument.

    The better argument may be that in fie years, T-Mobile will cease to exist anyway, as they are not making enough money to continue to build out their spectrum to meet future demand with the monetary resources they currently have. AT&T will buy T-Mobile now or in the future.

    Personally, I am just glad I decided not to switch to T-Mobile earlier this year.
    jglopic
    • RE: AT&T/ T-Mobile merger: What the players say

      @jglopic In which case, bankruptcy court would offer the consumer a more appropriate outlet to settle this... I don't see how the consumer benefits from less competition. There's more competition in Europe than in the US, and their rates are lower.
      snoop0x7b
      • RE: AT&T/ T-Mobile merger: What the players say

        @snoop0x7b <br>Have to look how that pie is sliced.<br>European countries have a smaller area, less regulation and better infrastructure as a result.<br>Make any country in Eu the size of the US with it's diversity and see if they do any better atm.....<br>Be a challenge. <br><br><img border="0" src="http://www.cnet.com/i/mb/emoticons/plain.gif" alt="plain">
        rhonin
    • RE: AT&T/ T-Mobile merger: What the players say

      @jglopic "The report that AT&T contributed $3 million to campaigns of House Democrats that have signed a letter supporting the merger shows this may be business as usual in Washington."

      Just legalized form of bribery that our politicians enjoy and use everyday!
      Masari.Jones
    • RE: AT&T/ T-Mobile merger: What the players say

      I have T Mobile I spend $10.00 a year :) Will soon be moving to Ecuador so I don't care what they do.
      adaedone@...
    • RE: AT&T/ T-Mobile merger: What the players say

      @jglopic exactly. This is where its a fail. If neither of them have enough spextrum, how is adding both of their inadequate spectrums together going to make that problem go away? Oh wait, its not.
      Although Sprint can gain a lot from the tmobile merger. All they woyod have to do is offer a nice deal to anyone on tmobile willing to jump ship, and they will easily grab half of tmobiles subscriber base.
      Jimster480
  • Why is the world not perfect?

    Everybody wants to go to Heaven, but nobody wants to die.

    Three per cent of AT&T's broadband customers use 40% of the bandwidth. So one obvious way to relieve the bandwidth crunch is to ditch the 'unlimited' plans and move to metered service. But as soon as anyone suggests that, we are inundated with articles that say, "We're all gonna die. It's a ripoff! Consumers will suffer!"

    There is a huge amount of waste in the way broadband spectrum is used, and everyone knows it. There are technologies that could double or triple the effective capacity of the existing plant and equipment. These technologies involve "shaping" the traffic according to what's in the packets. Try to do that, and this time you get demagogues hollering about "net neutrality" and having to treat all packets the same.

    The only thing for sure is that if we leave it up to the politicians, we are going to get the wireless broadband we deserve.
    Robert Hahn
    • RE: AT&T/ T-Mobile merger: What the players say

      @Robert Hahn As I am one of those 3% (I'm assuming that you mean those with AT&T still on the "unlimited" 5GB/m plan) I feel that ALL of the plans are a rip off. IF the carriers were to give us a bucket of data at a reasonable price and allow us to use that data for whatever (surfing the web and using apps that require data usage on the device, tethering, hotspot, etc) and not put an artificial throttle when we get close to our limit (or cap in the case of the "unlimited" 5GB/m plans) then I would not consider the current data plan offerings a rip off.

      And BTW I plan on holding on to my unlimited data plan until such changes are made or I am no longer able to to do so.

      And yes I also think all data packets should be treated the exact same be they emails, streaming media, legal torrent files (yes, they DO exist), or whatever.

      So I guess in short I fully disagree with your position on this topic.
      athynz
    • RE: AT&T/ T-Mobile merger: What the players say

      @Robert Hahn
      A very misleading statistic.
      The majority of ATT users do not utilize smartphones. There is significant rural area that has minimal 3g coverage (fairly new coverage) and high concentration population centers are not built up to handle the log increase.
      Why else do you think ATT is adding free wifi spots to NY?
      I know here in Los Angeles, for ATT to add additional infrastructure, the legal hoops they have to jump through makes it difficult and unlikely to allow them to keep up with demand. They really have limited options that allows a short term solution till the LTE network rolls out.

      Personally I really have no concern either way.
      As an ATT user, I think it is a good thing.
      rhonin
    • RE: AT&T/ T-Mobile merger: What the players say

      @Robert Hahn
      Typo I assume.. "The only thing for sure is that if we leave it up to the politicians, we are going to get the wireless broadband we deserve."

      If not, you need your head examined.
      mschauber
      • RE: AT&T/ T-Mobile merger: What the players say

        @MedicNYC I think he's saying if we leave it up to them, we deserve crap.
        Greenman76
      • RE: AT&T/ T-Mobile merger: What the players say

        @MedicNYC @Robert Hahn: Yes, that last sentence made Robert's entire post confusing.
        Ndna Jnz
      • RE: AT&T/ T-Mobile merger: What the players say

        @MedicNYC et al
        Really? Did that statement really confuse you all?
        I suggest a course in sarcasm and political satire (and honest truth) then. If we choose to leave it up to the machine, then we will ABSOLUTELY get what we deserve.
        FlyingsCool
    • RE: AT&T/ T-Mobile merger: What the players say

      I don't like your suggestion, in the same breath; however, I have been weeing myself off of it. Internet should be free for a basic 500k/sec, for the email and shopping user. I don't like AT&T. I don't use wireless, I have no use for it and my cable company is WOWWAY, pretty awesome, $64 bucks a month for basic digital cable and 8 m/sec down with one up internet. I use Skype as my home phone and T mobile for $10 bucks a year, emergencies only. I used to be a gadget guy but today I find it a waste of money and time.
      adaedone@...
    • You mean cheaper and faster?

      @Robert Hahn If we'd left it to the government, and they'd actually done something, it would be like Europe or Asia. We would get faster service for much less. Phones locked-to-carrier would be illegal. There are multiple studies that have shown the above is true. The USA no longer has the technological lead when it comes to bandwidth. South Korea does!

      Nobody is building out new fiber, it isn't profitable for them. They've figured out they can do throttling, and tell customers "Too bad, stop hogging". And people like you believe it! I can't even download software from work over *land lines* without getting throttled upstream.

      We don't have a highway interstate system courtesy of private companies, the internet should be the same way.
      desklamp4
  • RE: AT&T/ T-Mobile merger: What the players say

    I have been with T-Mobile since 2001 and I have to tell you the thought of a merger with AT&T is devastating! I have never had any problem with the service provided by T-Mobile and the customer care that they provide is superb, and that is very important to me! My husband and daughter both have service with AT&T and the amount of dropped calls and the substandard customer service is just a turn off!

    I hope the FCC does not approve the merger and T-Mobile is left to continue providing consumers with their superb brand of service. And if that's only a dream, then hopefully AT&T will take note of how T-Mobile does business and follow suit.
    KitCat1358
    • RE: AT&T/ T-Mobile merger: What the players say

      @KitCat1358

      My husband and I fell victim to the Alltel/AT&T merger. Your take on the dropped calls and substandard customer service is right on the mark. Worse yet, we were not given a choice as to whether or not we wanted to go with AT&T. We were under contract with Alltel at the time of the merger, so we are stuck with AT&T until our contract runs out - or pay 250.00 per line to be released. I think we get screwed either way.
      julifnash@...
    • RE: AT&T/ T-Mobile merger: What the players say

      @KitCat1358 I agree with you, I think that AT&T blows bubbles. They overcharge for their home DSL market and it sucks, it is worse than Comcast. Although, I only use about $10 worth of T Mobile a year, I have never had a problem. I have heard that Verizon users are much happier with their broadband wireless services.
      adaedone@...
    • RE: AT&T/ T-Mobile merger: What the players say

      @KitCat1358 "This transaction will thus benefit consumers by reducing the number of dropped and blocked calls... [and] improving in-building coverage."

      Seems like AT&T is just talking about its own customers, since I don't really get that problem with T-Mobile.

      Reminds me of when I was with the former AT&T right before it got eaten up by Cingular, something I'd care to not happen to me again. AT&T nowadays needs to stop being a piece of junk marketing-only company and actually build their network to be both bigger and better rather than spending it on trying to convince me that it's bigger and better than it actually is.
      Royal_Knight
      • RE: AT&T/ T-Mobile merger: What the players say

        @Royal_Knight "Seems like AT&T is just talking about its own customers, since I don't really get that problem with T-Mobile."

        Yep. That's why almost all of the ATT customers are telling us "just shut up, suck it up and deal with it". They have everything to gain and all we are gaining is higher priced plans.
        waterhzrd