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ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

2 recommendations

I'm not so sure it's dead

Yes, the deal to swallow T-Mobile whole may in fact be dead, but there are other ways to accomplish the same thing. This is what AT&T might try to do:

1. Enter into a spectrum-sharing deal with T-Mobile. Essentially, both companies' customers could roam on either network, at least on GSM. 3G is a problem because of incompatible bands, but there's no problem with GSM roaming.

2. Start buying unused spectrum from T-Mobile. Start out in more rural areas so it's less likely anyone will notice and complain.

3. Start buying small T-Mobile markets, especially in areas with a regional competitor, so there won't be as much of a competitive shift by losing a player.

4. Work with DT to harmonize bands. That means T-Mobile's 1700 3G goes away and gets replaced by LTE. At the same time, T-Mobile will start selling phones that work on AT&T's 3G and LTE bands.

5. T-Mobile will raise its prices to at least match AT&T's prices. At the same time, those harmonized phones will s-l-o-w-l-y roll out, but they won't come out fast enough to allow everyone to get one. And the price hike might even come first, just for good measure.

6. Once enough markets have been sold off to AT&T, T-Mobile will be a shell of its former self. And, with its higher prices, fewer and fewer people will want to use it. It'll be a carrier on a downward slide.

7. AT&T will make another offer for a smaller and less viable T-Mobile. Naturally, DT will accept, and it will be pitched to regulators as a way to put the assets of a dying carrier to good use. As for the loss of competition, well, it's obvious that the market couldn't support the existing number of carriers, as evidenced by T-Mobile's troubles. And, with luck, by this time there may be a more friendly administration in office.

The deal might take a bit longer this way, but, in the meantime, T-Mobile's frequencies will have been reconfigured to match AT&T's, which had to be done anyway, and prices will have been raised to match AT&T's, so there will be fewer customers potentially grandfathered on cheaper plans. And, if AT&T and DT really wanted to get rid of those customers, DT could simply shut down T-Mobile right before the new buyout deal is announced. Customers would be allowed to leave without an ETF, which means no grandfathered customers, and it has the added benefit of making T-Mobile look like a dead carrier, which all but assures the deal of going through.

You read it here first, folks.

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Re: I'm not so sure it's dead

I am not sure it is dead either. Sharing agreements, partnership, TMO becoming a MVNO on AT&T system, etc are all possible outcomes. As long as DT wants to unload TMO, anything is still possible.
SauceMaster

join:2004-08-01
Kokomo, IN
Too bad several things of what you mentioned has already been reported or talked about at some point and even over the past few weeks.

So no we didn't read it here first ... lmao

Yes , something could still happen but the odds are getting more slim by the day and every time AT&T opens it's mouth in a tantrum fashion.

jdlawyer

@wideopenwest.com
I agree with you. AT&T is absolutely committed to taking out T-Mobile. That's what this is all about. AT&T will not stop until T-Mobile is gone. What other explanation is there when you consider that AT&T willing to pay $39 billion to buy T-Mobile when it would only cost them $3.7 billion to build out their own nationwide 4G network. AT&T is not going to stop until they accomplish their mission.

m35g35

@wideopenwest.com
don't let number 5 out to the DOJ! That is one of their points, a low cost carrier to hold in check ATT and Verizon. The change of frequencies is a FCC issue, which ATT withdrew the application. T-Mo is not dead contrary to your thinking. ATT is trying really hard to kill them off so they can raise prices and limit services, as we are starting to see since the merger has been announced. Just wait if ATT does get a deal through the DOJ and the courts. It will really suck.

philyew

@consolidated.net
Here's my take on the AT&T rationale for the deal and where the current developments leave them:

1) Deutsche Telekom are dead set on exiting the US market, meaning TM USA was definitely going to be sold to someone, and the most likely buyer was Sprint until AT&T stepped in. It was critically important for AT&T to prevent Sprint from growing dynamically to rival its customer base (88m v. 95m) and thus become a real challenger for the #2 spot in the market. Fighting of the challenge of a credible alternate #2 would cost them far more in the long run.

2) Killing TM USA as a competitor was a welcome but insubstantial consequence. In other words, the deal was NOT primarily motivated by the objective of killing off TM, which in itself would not justify the $39 billion expense.

3) AT&T are significantly behind Verizon in the race to deploy LTE and establish a stranglehold on the next generation wireless market. This carries huge potential to expand revenues beyond the traditional mobile telephony market which has now reached saturation point (mobile subscriptions already match the total population of the country).

4) LTE deployment can be cheaper and much more rapid by re-provisioning already deployed spectrum rather than establishing the service through the new deployment of the 700 mhz bandwidth.

5) The TM deal only has value if (a) it prevents Sprint from acquiring TM and (b) AT&T avoids having to start spending serious money on their deployment of the 700 mhz band.

6) If the legal process is dragged out too long, AT&T will have to start spending on a serious deployment of 700 mhz bandwidth or be totally defeated by Verizon in that crucial race.

7) If the acquisition attempt is abandoned without the DoJ trial ever happening, it will probably not have established sufficient legal argument to take down a Sprint takeover as well. AT&T are relying on the possible failure of their application also ruling out a Sprint deal, so they really need to go to trial even if they lose in the process.

Taken together, this means that there will probably be no appetite for an AT&T/TM deal over the long term.

If the deal fails, DT will be in a hurry to find another buyer and, as long as it is not Sprint, that will be fine by AT&T.

AT&T will be consumed by the need to recover lost ground in the LTE deployment race rapidly. That will push them full speed ahead into their 700 mhz deployment, rather than waiting for a more slowly evolving infrastructure relationship to develop with the resulting TM organization.
clone

join:2000-12-11
Portage, IN
Reviews:
·T-Mobile US

Re: I'm not so sure it's dead

said by philyew :

If the deal fails, DT will be in a hurry to find another buyer and, as long as it is not Sprint, that will be fine by AT&T.

And, given that, I'd love to see Vodafone buy TM USA.

Everyone assumes if that were to happen, they would be forced to sell their stake in VZW, but I'm not so sure. If the FCC/DOJ actually entertained the idea of AT&T buying TM USA, why wouldn't they consider that arrangement? This would give TM USA a LTE roaming partner within the USA to supplement their coverage, and create an unstoppable force in wireless.

Which is actually fine by me, if only because it would ruin AT&T's day and actually force them to compete (or not, given their history thus far).

philyew

@consolidated.net

Re: I'm not so sure it's dead

Interesting thought...but I can't get my head around the idea that Vodafone would be allowed to continue with a 45% share of Verizon Wireless and a 100% share of TM USA, when the legal argument that would defeat the AT&T takeover will also very probably defeat a takeover by a company like Sprint, which is barely half the size of VZW.