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rolande
Certifiable
Premium,Mod
join:2002-05-24
Dallas, TX
kudos:6
Reviews:
·AT&T U-Verse
·ViaTalk

T-Mobile's exit strategy

Personally, I think that T-Mobile has been struggling internally for some time now to figure out if it was worth staying in the US market. They have not enjoyed high margin cash infusion that would allow them to pay for more rapid buildouts and platform upgrades. I think they were in a rock and a hard place financially and did not see a good forecast on the horizon given that situation. I think this whole deal was orchestrated for them to exit the market without looking like the bad guy to their customers and put a good chunk of cash in their pockets at the same time. Better to sell your assets while they are still worth something, rather than let the service implode on itself over the coming years.

So, we may all cry foul at at&t but I think that they are just taking advantage of a situation that was going to happen one way or another. I don't believe there was any hostile takeover going on here. T-Mobile offered them a gift, wrapped in a bright pink bow. (I do think it is quite ironic given the mud slinging ad campaigns of late) But, you can't blame at&t. They are only doing what they are supposed to do for their shareholders. Organic growth is not always enough to satisfy your investors.

Ultimately, the Federal Government could step in and decide that this deal is very bad for consumers and they could block it. This alternative outcome might actually be worse in the long run. T-Mobile may then be forced to attempt a spin-off or sell at a fire sale. Either way, the resulting entity would likely have nowhere near the financial leverage to sustain any real growth or competition against the incumbents. So, in the end, the net effect might be worse for the market than an at&t buyout. Having 2 mediocre competitors will do nothing to pull prices downward for the other 2.

Either way, I think that Verizon and Sprint stand to gain a large number of ex-T-Mobile subscribers. You can count me on that list.
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Scott, CCIE #14618 Routing & Switching
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