4 ms·

As a Sprint customer, I think this deal will be good for competition in the wireless market. Both Sprint and T-Mobile struggle to compete with AT&T and Verizon

As a Sprint customer, I think this deal will be good for competition in the wireless market. Both Sprint and T-Mobile struggle to compete with AT&T and Verizon in coverage, so hopefully the merger will allow T-Mobile to invest in greater coverage and speed.

deleted 8y ago
[deleted]
joe_the_user 8y ago
I switched from Sprint to T-mobile a while back. My impression of Sprint then was they were essentially milking their customers for whatever they could get while offering inferior service - requiring the renewal of their lousy contracts to continue at any one point and naturally having an inferior collection of phones you could only use with them, having goofy conditions for getting a replacement phone etc. T-mobile's sell was offering no-contract service and having a network that you could buy broadly available GSM phones for (where with Sprint, you to switch carriers, you had to throw your phone away). I really hope the merger will be more a mass transfer of Sprint customers to T-Mobile (and the existing T-mobile approach) but it could well involve the opposite; A big accumulation of customers could wind-up be squeezed for all they have as the combined effort is run into the ground. (that is a strategy that yield cash for investors, it's not more "irrational" than spending a bunch for growth, indeed, "build monopoly with low margins, exploit monopoly with high margins, little service and little capital investment" is natural for many companies and industries.) I mean, keep in mind the two carriers have incompatible networks, incompatible phones and so-forth so soon or later, there will have to be a "reconning" where one ex-carrier's phones become useless, yay!.
- adventured 8y ago
  Fortunately T-Mobile isn't a position to milk customers here. They'll get destroyed by AT&T and Verizon rapidly if they attempt to go that direction (I think they know they'll still have to run uphill). T-Mobile + Sprint has no monopoly position at all that they can stand upon: both AT&T and Verizon have national coverage, vast resources, massive businesses with very large income streams. I'd argue quite the opposite, for the next five years at least they'll have to work twice as hard after merging with Sprint, to make sure they don't implode. Sprint is carrying a giant debt bomb around its neck and has negative $24 billion in net tangible assets and $32 billion in long-term debt. Sprint has basically done nothing but lose money perpetually. T-Mobile only recently got to a position of passable financial footing. Before that they bled red ink perpetually as well. It's a small miracle they weren't crushed by the duopoly. Their considerably negative balance sheet still shows the scars of that. Combined the two will have $44 billion in long-term debt, with only T-Mobile's modest recent profit credibility to support it. They're likely to lose money, or close to it, initially as a combined entity until the Sprint side of the business is cleaned up. Mistreating customers and abandoning what has worked so well for T-Mobile, would likely result in a financial disaster for the merged entity. On the flip side, if they just do the obvious thing and keep doing what worked so well for T-Mobile - a few years out they've got a hundred billion in sales, a hundred billion dollar plus market cap, and $6 billion in annual net income, with the scale and resources to legitimately stand toe to toe with AT&T and Verizon.
- LogicX 8y ago
  Just to be clear, sprint supports selective BYOD. I recently migrated to sprint via the 1 year free deal at http://sprint.com/1yearfree http://sprint.com/1yearfree - which supports a dozen or more phones.
- bestnameever 8y ago
  > I mean, keep in mind the two carriers have incompatible networks, incompatible phones and so-forth so soon or later, there will have to be a "reconning" where one ex-carrier's phones become useless, yay!. This actually is increasingly not true. This deal also allows for Sprint customers to roam onto TMobile starting today, so the networks and phones are not as incompatible as you believe.
- brownbat 8y ago
  I once switched to T-Mobile from the plan Sprint offered to families of employees. At one point T-Mobile had better plans for the public than Sprint had as a private perk. I sometimes wonder what would happen if a Bezos or Walton wandered into telecommunications, seeking the lowest possible margins, what mad havoc it would wreak.
  - rayiner 8y ago
    Ultra low margins works in retail because it’s less capital intensive and risk is low. If Wal-Mart stopped innovating they’d still dominate for what, a decade or two? If a carrier decided to sit out a round of cellular evolution (let’s save $20 billion and skip 5G)? Even Verizon couldn’t do that. Or, if they bet on the wrong technology, like Sprint. In the 3G era they had about equal market share to Verizon and Cingular (which became AT&T), but bet on WiMAX for 4G and never recovered from that.
    - brownbat 8y ago
      I find that theory really compelling... but if I look around for businesses sorted by margins, I find several counterexamples. Oil and gas as a sector has pretty mediocre margins. Energy generally, even when it's not a utility with government stipulated rates. https://seekingalpha.com/article/269679-oil-industry-profit-margin-ranks-fairly-low-there-are-bigger-fish https://seekingalpha.com/article/269679-oil-industry-profit-... It's possible that the counterexamples are just outliers and you're still right. Or maybe there's another factor, like you mention, how static is the industry and how much continual innovation or development is required. Regardless, padded margins isn't necessarily an indicator of long term health. If you can safely charge your customers a significant premium, to pay for research or expansion for the health of the business in 10 years, there will be pressure from some shareholders and short term execs to raid the piggy bank. Keep prices high while lowering future investment. The other odd thing about this as a hard law is MVNOs. Low cost competitors are renting space on existing networks. They're probably not paying lower than cost? I suppose they could be, but subsidized by the high paying customers of that network... Hmm. I generally have a visceral feeling of being gouged any time I've paid any telecom provider, but maybe you're right and that's not entirely fair. I'll definitely have to give it some more thought.
noobermin 8y ago
I can see how you feel in your specific position, but the better solution would be for AT&T and Verizon to lose their unbalanced share in the market, not for further consolidation of the smaller providers.
a3n 8y ago
> Both Sprint and T-Mobile struggle to compete with AT&T and Verizon in coverage Indeed, and I've been considering switching from T-Mobile to Verizon for exactly that reason, much as I like T-Mobile. I'm a long haul trucker, and there are long stretches of I-90, I-80 and I-70 where I have to roam, and therefore data is capped. It's not a disaster, but it makes it more difficult to stay firmly and broadly (pun intended) connected to the web, my employer and my family when I'm roaming. I've taken to having my phone look for existing networks whenever I stop. Verizon is almost always available, and T-Mobile is often not. I don't pay attention to Sprint's availability; I left them long ago because they're Sprint.
ryao 8y ago
T-Mobile does not appear to be struggling. Their coverage is supposed to match Verizon now. It was better than Verizon at my house the last I checked. Oddly, I live in one of the few places where Verizon’s coverage is terrible compared to the other 3 carriers. :/

deleted 8y ago

[deleted]

joe_the_user 8y ago

I switched from Sprint to T-mobile a while back. My impression of Sprint then was they were essentially milking their customers for whatever they could get while offering inferior service - requiring the renewal of their lousy contracts to continue at any one point and naturally having an inferior collection of phones you could only use with them, having goofy conditions for getting a replacement phone etc. T-mobile's sell was offering no-contract service and having a network that you could buy broadly available GSM phones for (where with Sprint, you to switch carriers, you had to throw your phone away). I really hope the merger will be more a mass transfer of Sprint customers to T-Mobile (and the existing T-mobile approach) but it could well involve the opposite; A big accumulation of customers could wind-up be squeezed for all they have as the combined effort is run into the ground. (that is a strategy that yield cash for investors, it's not more "irrational" than spending a bunch for growth, indeed, "build monopoly with low margins, exploit monopoly with high margins, little service and little capital investment" is natural for many companies and industries.) I mean, keep in mind the two carriers have incompatible networks, incompatible phones and so-forth so soon or later, there will have to be a "reconning" where one ex-carrier's phones become useless, yay!.

adventured 8y ago
Fortunately T-Mobile isn't a position to milk customers here. They'll get destroyed by AT&T and Verizon rapidly if they attempt to go that direction (I think they know they'll still have to run uphill). T-Mobile + Sprint has no monopoly position at all that they can stand upon: both AT&T and Verizon have national coverage, vast resources, massive businesses with very large income streams. I'd argue quite the opposite, for the next five years at least they'll have to work twice as hard after merging with Sprint, to make sure they don't implode. Sprint is carrying a giant debt bomb around its neck and has negative $24 billion in net tangible assets and $32 billion in long-term debt. Sprint has basically done nothing but lose money perpetually. T-Mobile only recently got to a position of passable financial footing. Before that they bled red ink perpetually as well. It's a small miracle they weren't crushed by the duopoly. Their considerably negative balance sheet still shows the scars of that. Combined the two will have $44 billion in long-term debt, with only T-Mobile's modest recent profit credibility to support it. They're likely to lose money, or close to it, initially as a combined entity until the Sprint side of the business is cleaned up. Mistreating customers and abandoning what has worked so well for T-Mobile, would likely result in a financial disaster for the merged entity. On the flip side, if they just do the obvious thing and keep doing what worked so well for T-Mobile - a few years out they've got a hundred billion in sales, a hundred billion dollar plus market cap, and $6 billion in annual net income, with the scale and resources to legitimately stand toe to toe with AT&T and Verizon.
LogicX 8y ago
Just to be clear, sprint supports selective BYOD. I recently migrated to sprint via the 1 year free deal at http://sprint.com/1yearfree http://sprint.com/1yearfree - which supports a dozen or more phones.
bestnameever 8y ago
> I mean, keep in mind the two carriers have incompatible networks, incompatible phones and so-forth so soon or later, there will have to be a "reconning" where one ex-carrier's phones become useless, yay!. This actually is increasingly not true. This deal also allows for Sprint customers to roam onto TMobile starting today, so the networks and phones are not as incompatible as you believe.
brownbat 8y ago
I once switched to T-Mobile from the plan Sprint offered to families of employees. At one point T-Mobile had better plans for the public than Sprint had as a private perk. I sometimes wonder what would happen if a Bezos or Walton wandered into telecommunications, seeking the lowest possible margins, what mad havoc it would wreak.
- rayiner 8y ago
  Ultra low margins works in retail because it’s less capital intensive and risk is low. If Wal-Mart stopped innovating they’d still dominate for what, a decade or two? If a carrier decided to sit out a round of cellular evolution (let’s save $20 billion and skip 5G)? Even Verizon couldn’t do that. Or, if they bet on the wrong technology, like Sprint. In the 3G era they had about equal market share to Verizon and Cingular (which became AT&T), but bet on WiMAX for 4G and never recovered from that.
  - brownbat 8y ago
    I find that theory really compelling... but if I look around for businesses sorted by margins, I find several counterexamples. Oil and gas as a sector has pretty mediocre margins. Energy generally, even when it's not a utility with government stipulated rates. https://seekingalpha.com/article/269679-oil-industry-profit-margin-ranks-fairly-low-there-are-bigger-fish https://seekingalpha.com/article/269679-oil-industry-profit-... It's possible that the counterexamples are just outliers and you're still right. Or maybe there's another factor, like you mention, how static is the industry and how much continual innovation or development is required. Regardless, padded margins isn't necessarily an indicator of long term health. If you can safely charge your customers a significant premium, to pay for research or expansion for the health of the business in 10 years, there will be pressure from some shareholders and short term execs to raid the piggy bank. Keep prices high while lowering future investment. The other odd thing about this as a hard law is MVNOs. Low cost competitors are renting space on existing networks. They're probably not paying lower than cost? I suppose they could be, but subsidized by the high paying customers of that network... Hmm. I generally have a visceral feeling of being gouged any time I've paid any telecom provider, but maybe you're right and that's not entirely fair. I'll definitely have to give it some more thought.

noobermin 8y ago

I can see how you feel in your specific position, but the better solution would be for AT&T and Verizon to lose their unbalanced share in the market, not for further consolidation of the smaller providers.

a3n 8y ago

> Both Sprint and T-Mobile struggle to compete with AT&T and Verizon in coverage Indeed, and I've been considering switching from T-Mobile to Verizon for exactly that reason, much as I like T-Mobile. I'm a long haul trucker, and there are long stretches of I-90, I-80 and I-70 where I have to roam, and therefore data is capped. It's not a disaster, but it makes it more difficult to stay firmly and broadly (pun intended) connected to the web, my employer and my family when I'm roaming. I've taken to having my phone look for existing networks whenever I stop. Verizon is almost always available, and T-Mobile is often not. I don't pay attention to Sprint's availability; I left them long ago because they're Sprint.

ryao 8y ago

T-Mobile does not appear to be struggling. Their coverage is supposed to match Verizon now. It was better than Verizon at my house the last I checked. Oddly, I live in one of the few places where Verizon’s coverage is terrible compared to the other 3 carriers. :/