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I think that is overstating the negative. You basically are going to get significant coverage improvements for TMO and ATT customers, and the cost will be poten

by NoPiece 15y ago

I think that is overstating the negative. You basically are going to get significant coverage improvements for TMO and ATT customers, and the cost will be potential price increases due to decreased competition. As an ATT customer, I really want the Tmo bandwidth. I'll take the risk.

fpgeek 15y ago
I think you missed the point of the leaked letter. It claims that AT&T could have gotten the relevant coverage improvements for roughly 1/10 the price of the merger ($3.8 billion vs $38 billion). Why is AT&T willing to pay the extra $34+ billion? Taking out a key competitor seems like the obvious motive.
- ericd 15y ago
  I wonder why they haven't gone ahead and made coverage improvements, then. Perhaps they've calculated that increased user satisfaction won't net them $3.8 billion more in profit.
  - gvb 15y ago
    The coverage improvements would take years to build out their existing infrastructure with new base stations (erect new towers or lease space on existing towers, purchase and install equipment). By buying TMO, they would get an instantaneous coverage increase and instantaneous capability increase. There has to be a substantial cost of opportunity if it takes them (e.g.) 5 years to build the infrastructure themselves. There also is the risk that ATT could not achieve the full coverage because it has gotten increasingly difficult to get zoning permissions to build unsightly cell towers.
    - kwantam 15y ago
      > By buying TMO, they would get an instantaneous > coverage increase and instantaneous capability > increase. Not really. Most of the coverage AT&T is lacking and proposed to build out to expand from 8x% to 9x% coverage is in rural areas where T-Mobile's network is even weaker than AT&T's. In other words, there are very few places where T-Mobile has coverage and AT&T doesn't already; most of the new coverage they'd get in this deal is redundant.
      - fpgeek 15y ago
        Beyond that, we're primarily talking about LTE coverage. That would require significant additional investment even if you added T-Mobile's (GSM/UMTS/HSPA+) infrastructure to the mix.
  - SkyMarshal 15y ago
    That's in the letter too. ATT stopped considering building out their own network for $3.8B back in Jan, right around the time they started considering acquiring T-Mobile for $38B. They decided to spend 10 times more on a process of regulatory approval and service integration that would likely take about as long as it would to simply build out their own network. The implication being that ATT isn't doing this for T-Mo's network, but anti-competitively to crush Sprint by preventing them from getting T-Mobile's network and customers.
- NoPiece 15y ago
  I knew I'd get down voted because this is an emotional issue for some. I didn't miss the point of the letter. It said the cost woud be to 3.8 billion to move LTE coverage from 80% to 97%. It didn't say the cost of matching the entire Tmo footprint in the US would be 3.8 billion. There would be massive coverage infill improvements for ATT by taking on the Tmo towers in addition to the LTE improvement. This would be a massive win for ATT customers in quality of service. It may bite them in price down the road, but definite good in the short term.

by NoPiece 15y ago

fpgeek 15y ago

I think you missed the point of the leaked letter. It claims that AT&T could have gotten the relevant coverage improvements for roughly 1/10 the price of the merger ($3.8 billion vs $38 billion). Why is AT&T willing to pay the extra $34+ billion? Taking out a key competitor seems like the obvious motive.

ericd 15y ago
I wonder why they haven't gone ahead and made coverage improvements, then. Perhaps they've calculated that increased user satisfaction won't net them $3.8 billion more in profit.
- gvb 15y ago
  The coverage improvements would take years to build out their existing infrastructure with new base stations (erect new towers or lease space on existing towers, purchase and install equipment). By buying TMO, they would get an instantaneous coverage increase and instantaneous capability increase. There has to be a substantial cost of opportunity if it takes them (e.g.) 5 years to build the infrastructure themselves. There also is the risk that ATT could not achieve the full coverage because it has gotten increasingly difficult to get zoning permissions to build unsightly cell towers.
  - kwantam 15y ago
    > By buying TMO, they would get an instantaneous > coverage increase and instantaneous capability > increase. Not really. Most of the coverage AT&T is lacking and proposed to build out to expand from 8x% to 9x% coverage is in rural areas where T-Mobile's network is even weaker than AT&T's. In other words, there are very few places where T-Mobile has coverage and AT&T doesn't already; most of the new coverage they'd get in this deal is redundant.
    - fpgeek 15y ago
      Beyond that, we're primarily talking about LTE coverage. That would require significant additional investment even if you added T-Mobile's (GSM/UMTS/HSPA+) infrastructure to the mix.
- SkyMarshal 15y ago
  That's in the letter too. ATT stopped considering building out their own network for $3.8B back in Jan, right around the time they started considering acquiring T-Mobile for $38B. They decided to spend 10 times more on a process of regulatory approval and service integration that would likely take about as long as it would to simply build out their own network. The implication being that ATT isn't doing this for T-Mo's network, but anti-competitively to crush Sprint by preventing them from getting T-Mobile's network and customers.
NoPiece 15y ago
I knew I'd get down voted because this is an emotional issue for some. I didn't miss the point of the letter. It said the cost woud be to 3.8 billion to move LTE coverage from 80% to 97%. It didn't say the cost of matching the entire Tmo footprint in the US would be 3.8 billion. There would be massive coverage infill improvements for ATT by taking on the Tmo towers in addition to the LTE improvement. This would be a massive win for ATT customers in quality of service. It may bite them in price down the road, but definite good in the short term.