5 ms·

In AT&T & T-Mobile Merger, Everybody Loses

124 points by alecperkins 16y ago

apress 16y ago
Very interesting piece though weirdly doesn't mention Apple (at least as of right now, maybe he'll update?). Plus for Apple is access to more customers for iPhone though right now T-Mobile 3G network is incompatible with GSM/3G version of iPhone. Downside is greater bargaining power of AT&T and Verizon as carrier space consolidates. But with regards to Google, it seems kind of silly to suggest tiny, market-share losing T-Mobile was all that stood between the carriers hijacking Android and nirvana. Google's biggest bargaining chip with carriers is the inclusion of very popular Google Android services like mapping, voice to text etc. And Verizon and AT&T seem pretty high on Android to prevent Apple from gaining too much sway. Lots more to come on this one...
- alecperkins 16y ago
  Hmmm it is funny that Apple isn't mentioned, given its influence in the hardware side. A general suspicion has been that Apple will open up the iPhone to other carriers with the next rev. I wonder if this will impact that plan at all (if it exists). Now, they don't need to expand the carrier offering to increase the customer base. But, it's a greater customer base entirely within AT&T. But, AT&T will now — presumably — have better coverage. But, AT&T is already strongly disliked as a brand, and this doesn't change that. And so on… I would think that Apple is at best wary of the merger, since, like the rest of the hardware providers, the increased bargaining power of the carriers is a problem.
  - kelnos 16y ago
    Long-term ATT'll have better coverage, but for now, not so much. Basically they (that is, existing ATT customers) get T-Mo's 2G/EDGE network, but that's about it. 3G is still on two different channels, so ATT/T-Mo customers are still split there. ATT's 4G network is nonexistent, while T-Mo's is brand-new and tiny. Moving forward, as they build out 4G, this is a net win, but the merger doesn't help anyone's 3G coverage. Ugh... I hate this. I really don't want to be an ATT customer.
kenthorvath 16y ago
Does this mean I will now have an additional array of cell towers to boost my otherwise crappy reception? Will this result in load balancing for AT&T's overwhelmed 3G network?
- tsotha 16y ago
  Yeah. That's where he's wrong. Existing AT&T customers are going to come out far ahead from this deal.
  - SoftwareMaven 16y ago
    But our wallets likely won't.
    - tsotha 16y ago
      I disagree. As it stands both AT&T and T-Mobile are starved for spectrum. That renders them (especially T-Mobile) unable to compete effectively with Verizon. How can you compete on price when you can't deliver the level of service your customers expect?
- gamble 16y ago
  T-Mobile's phones operate on a different frequency than AT&T. I don't see them merging the two networks. Chances are that T-Mobile's network will be put in maintenance mode, with any new customers receiving phones on AT&T's frequencies, until the LTE transition is complete and AT&T can shut down the T-Mobile network. It may be a boon for existing T-Mobile customers, who will presumably be able to use multi-band GSM phones on AT&T without roaming fees.
  - jarek 16y ago
    Putting AT&T-frequency radios on previously-T-Mobile towers is a relatively low-cost possibility that would help with AT&T reception/bandwidth, although that will probably have to wait at least a year or so until the back-end routing systems are merged.
jdludlow 16y ago
I left AT&T for T-Mobile years ago, because AT&T's customer service is terrible while T-Mobile's is excellent. I won't give AT&T my money ever again, but my choices keep narrowing. I doubt that I'm alone, which means that Verizon could easily "not lose" contrary to the title of the thread.
- kovar 16y ago
  When I see posts such as this, I wonder what problems were encountered that required engagement with customer service, and what the expectations were. If the expectations were unreasonable, customer service is certain to get a bad rep. I've never had problems with AT&T's service which I use for two landlines, an iPhone and an iPad. I've had the landlines, and made changes to them, for over ten years. I've had multiple T1s with them over the years as well.
  - gthank 16y ago
    I'd settle for them managing to bill me properly for my POTS line after no more than 3 tries (it took 6 after my most recent move).
- fizx 16y ago
  My experience is that AT&T's level one support is excellent, their level two support is mostly ok, and their level three support is /dev/null.
- araneae 16y ago
  I left because Verizon because it cooperated with warrant-less wiretapping (as did AT&T) and T-mobile did not. Now I'm screwed because I have a Nexus One so I'm basically locked in. I bought the phone without a contract but it's not like it works with other networks.
  - deleted 16y ago
    [deleted]
- Lost_BiomedE 16y ago
ugh 16y ago
Well, at least Deutsche Telekom is probably happy to finally get rid of their stupid adventure in North America. They bought for 51 billion dollar eleven years ago, they are selling now for 39 billion dollar — all things considered probably not a bad deal.
- jarek 16y ago
  Hm - Wikipedia tells me Deutsche Telekom bought what was to become T-Mobile USA in 2001 for $24B. After inflation, that's around $30B in 2011. Where is the $51B figure coming from?
  - ugh 16y ago
    German press: http://www.sueddeutsche.de/wirtschaft/verkauf-von-t-mobile-usa-an-att-telekom-raeumt-ron-sommers-milliarden-fiasko-auf-1.1074783 http://www.sueddeutsche.de/wirtschaft/verkauf-von-t-mobile-u... Edit: So, I checked where that 51 billion is coming from. The German T-Mobile International article quotes 39.4 billion Euro and references the 2001 annual report, page 131. Here it is (2.4MB PDF monstrosity and German): http://www.download-telekom.de/dt/StaticPage/47/29/gb_d_komplett.pdf_47298.pdf http://www.download-telekom.de/dt/StaticPage/47/29/gb_d_komp... The relevant passage (German): „Am 31. Mai 2001 erwarb die Deutsche Telekom je 100 % an der VoiceStream Wireless Corporation, Bellevue, und der Powertel Inc., Bellevue, zu einem Gesamtkaufpreis von 39,4 Mrd. € inklusive einer Cash-Komponente von 4,9 Mrd. € und einer von der Deutschen Telekom bereits im September 2000 getätigten Investition in Vorzugsaktien von VoiceStream in Höhe von 5,6 Mrd. €.“ That passage basically says that they bought 100 percent of VoiceStream and Powertel for together 39.4 billion Euro. Well, we are still no closer to finding out what caused the discrepancy — maybe the Wikipedia article is simply wrong?
    - jarek 16y ago
      Intriguing - googling around I also saw the $51B number mentioned in http://www.networkworld.com/news/2011/032011-att-tmobile-acquisition-pundits.html http://www.networkworld.com/news/2011/032011-att-tmobile-acq..., and in contemporary articles http://www.photonics.com/Article.aspx?AID=6715 http://www.photonics.com/Article.aspx?AID=6715 and http://www.economist.com/node/449273 http://www.economist.com/node/449273 - but interestingly both appear to be written before the deal closed. On the other hand Wikipedia offers no citations for the $24B number. This is a massive discrepancy - wonder where it's coming from... edit: the $24B figure was introduced into Wikipedia in July 2007: http://en.wikipedia.org/w/index.php?title=T-Mobile_USA&diff=next&oldid=16343073 http://en.wikipedia.org/w/index.php?title=T-Mobile_USA&d... and not challenged since. On the other hand the main T-Mobile article gives a $50.7B figure with a citation. I [citation needed]-ed the $24B claim, let's see where it goes.
bgentry 16y ago
This makes me want to cry. AFAIK T-Mobile is the only US carrier that actually allows you to save money by not subsidizing your handset purchase. I saved $20 off of T-Mobile's already reasonable monthly rates by buying my Nexus One upfront. More importantly, the phone is unlocked. When I travel abroad, I can simply pop in a prepaid SIM card and I'm set. How many phones does AT&T sell that aren't SIM-locked to their network?
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bkaid 16y ago
Apple and iOS developers will probably win with this.
- chrisbolt 16y ago
  Why? T-Mobile isn't getting the iPhone, so they aren't getting access to any new subscribers.
skbohra123 16y ago
I always thought that these problems exists only in the developing nations, but alas.

124 points by alecperkins 16y ago

Very interesting piece though weirdly doesn't mention Apple (at least as of right now, maybe he'll update?). Plus for Apple is access to more customers for iPhone though right now T-Mobile 3G network is incompatible with GSM/3G version of iPhone. Downside is greater bargaining power of AT&T and Verizon as carrier space consolidates. But with regards to Google, it seems kind of silly to suggest tiny, market-share losing T-Mobile was all that stood between the carriers hijacking Android and nirvana. Google's biggest bargaining chip with carriers is the inclusion of very popular Google Android services like mapping, voice to text etc. And Verizon and AT&T seem pretty high on Android to prevent Apple from gaining too much sway. Lots more to come on this one...

alecperkins 16y ago
Hmmm it is funny that Apple isn't mentioned, given its influence in the hardware side. A general suspicion has been that Apple will open up the iPhone to other carriers with the next rev. I wonder if this will impact that plan at all (if it exists). Now, they don't need to expand the carrier offering to increase the customer base. But, it's a greater customer base entirely within AT&T. But, AT&T will now — presumably — have better coverage. But, AT&T is already strongly disliked as a brand, and this doesn't change that. And so on… I would think that Apple is at best wary of the merger, since, like the rest of the hardware providers, the increased bargaining power of the carriers is a problem.
- kelnos 16y ago
  Long-term ATT'll have better coverage, but for now, not so much. Basically they (that is, existing ATT customers) get T-Mo's 2G/EDGE network, but that's about it. 3G is still on two different channels, so ATT/T-Mo customers are still split there. ATT's 4G network is nonexistent, while T-Mo's is brand-new and tiny. Moving forward, as they build out 4G, this is a net win, but the merger doesn't help anyone's 3G coverage. Ugh... I hate this. I really don't want to be an ATT customer.

kenthorvath 16y ago

Does this mean I will now have an additional array of cell towers to boost my otherwise crappy reception? Will this result in load balancing for AT&T's overwhelmed 3G network?

tsotha 16y ago
Yeah. That's where he's wrong. Existing AT&T customers are going to come out far ahead from this deal.
- SoftwareMaven 16y ago
  But our wallets likely won't.
  - tsotha 16y ago
    I disagree. As it stands both AT&T and T-Mobile are starved for spectrum. That renders them (especially T-Mobile) unable to compete effectively with Verizon. How can you compete on price when you can't deliver the level of service your customers expect?
gamble 16y ago
T-Mobile's phones operate on a different frequency than AT&T. I don't see them merging the two networks. Chances are that T-Mobile's network will be put in maintenance mode, with any new customers receiving phones on AT&T's frequencies, until the LTE transition is complete and AT&T can shut down the T-Mobile network. It may be a boon for existing T-Mobile customers, who will presumably be able to use multi-band GSM phones on AT&T without roaming fees.
- jarek 16y ago
  Putting AT&T-frequency radios on previously-T-Mobile towers is a relatively low-cost possibility that would help with AT&T reception/bandwidth, although that will probably have to wait at least a year or so until the back-end routing systems are merged.

jdludlow 16y ago

I left AT&T for T-Mobile years ago, because AT&T's customer service is terrible while T-Mobile's is excellent. I won't give AT&T my money ever again, but my choices keep narrowing. I doubt that I'm alone, which means that Verizon could easily "not lose" contrary to the title of the thread.

kovar 16y ago
When I see posts such as this, I wonder what problems were encountered that required engagement with customer service, and what the expectations were. If the expectations were unreasonable, customer service is certain to get a bad rep. I've never had problems with AT&T's service which I use for two landlines, an iPhone and an iPad. I've had the landlines, and made changes to them, for over ten years. I've had multiple T1s with them over the years as well.
- gthank 16y ago
  I'd settle for them managing to bill me properly for my POTS line after no more than 3 tries (it took 6 after my most recent move).
fizx 16y ago
My experience is that AT&T's level one support is excellent, their level two support is mostly ok, and their level three support is /dev/null.
araneae 16y ago
I left because Verizon because it cooperated with warrant-less wiretapping (as did AT&T) and T-mobile did not. Now I'm screwed because I have a Nexus One so I'm basically locked in. I bought the phone without a contract but it's not like it works with other networks.
- deleted 16y ago
  [deleted]
Lost_BiomedE 16y ago

ugh 16y ago

Well, at least Deutsche Telekom is probably happy to finally get rid of their stupid adventure in North America. They bought for 51 billion dollar eleven years ago, they are selling now for 39 billion dollar — all things considered probably not a bad deal.

jarek 16y ago
Hm - Wikipedia tells me Deutsche Telekom bought what was to become T-Mobile USA in 2001 for $24B. After inflation, that's around $30B in 2011. Where is the $51B figure coming from?
- ugh 16y ago
  German press: http://www.sueddeutsche.de/wirtschaft/verkauf-von-t-mobile-usa-an-att-telekom-raeumt-ron-sommers-milliarden-fiasko-auf-1.1074783 http://www.sueddeutsche.de/wirtschaft/verkauf-von-t-mobile-u... Edit: So, I checked where that 51 billion is coming from. The German T-Mobile International article quotes 39.4 billion Euro and references the 2001 annual report, page 131. Here it is (2.4MB PDF monstrosity and German): http://www.download-telekom.de/dt/StaticPage/47/29/gb_d_komplett.pdf_47298.pdf http://www.download-telekom.de/dt/StaticPage/47/29/gb_d_komp... The relevant passage (German): „Am 31. Mai 2001 erwarb die Deutsche Telekom je 100 % an der VoiceStream Wireless Corporation, Bellevue, und der Powertel Inc., Bellevue, zu einem Gesamtkaufpreis von 39,4 Mrd. € inklusive einer Cash-Komponente von 4,9 Mrd. € und einer von der Deutschen Telekom bereits im September 2000 getätigten Investition in Vorzugsaktien von VoiceStream in Höhe von 5,6 Mrd. €.“ That passage basically says that they bought 100 percent of VoiceStream and Powertel for together 39.4 billion Euro. Well, we are still no closer to finding out what caused the discrepancy — maybe the Wikipedia article is simply wrong?
  - jarek 16y ago
    Intriguing - googling around I also saw the $51B number mentioned in http://www.networkworld.com/news/2011/032011-att-tmobile-acquisition-pundits.html http://www.networkworld.com/news/2011/032011-att-tmobile-acq..., and in contemporary articles http://www.photonics.com/Article.aspx?AID=6715 http://www.photonics.com/Article.aspx?AID=6715 and http://www.economist.com/node/449273 http://www.economist.com/node/449273 - but interestingly both appear to be written before the deal closed. On the other hand Wikipedia offers no citations for the $24B number. This is a massive discrepancy - wonder where it's coming from... edit: the $24B figure was introduced into Wikipedia in July 2007: http://en.wikipedia.org/w/index.php?title=T-Mobile_USA&diff=next&oldid=16343073 http://en.wikipedia.org/w/index.php?title=T-Mobile_USA&d... and not challenged since. On the other hand the main T-Mobile article gives a $50.7B figure with a citation. I [citation needed]-ed the $24B claim, let's see where it goes.

bgentry 16y ago

This makes me want to cry. AFAIK T-Mobile is the only US carrier that actually allows you to save money by not subsidizing your handset purchase. I saved $20 off of T-Mobile's already reasonable monthly rates by buying my Nexus One upfront. More importantly, the phone is unlocked. When I travel abroad, I can simply pop in a prepaid SIM card and I'm set. How many phones does AT&T sell that aren't SIM-locked to their network?

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bkaid 16y ago

Apple and iOS developers will probably win with this.

chrisbolt 16y ago
Why? T-Mobile isn't getting the iPhone, so they aren't getting access to any new subscribers.

skbohra123 16y ago

I always thought that these problems exists only in the developing nations, but alas.