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Analyst: Sprint/T-Mobile Merger Has 10% Chance of Approval
by Karl Bode 02:30PM Friday Jun 06 2014
In a note to investors this week, top telecom analyst Craig Moffett claims that the T-Mobile Sprint merger has less than 10% chance of seeing regulatory approval. "Approving all three would be untenable for the left," Moffet says of the Comcast/Time Warner Cable, AT&T/DirecTV and Sprint/T-Mobile mega-M&A trifecta. "Rejecting all three would be untenable for the right. At least one of the three would have to be rejected. And it's easy to see which one of the three it would be."

Granted with the flimsy justifications AT&T's using for their attempt to eliminate a pay TV competitor, that deal isn't sitting on regulatory approval bedrock, either. Comcast's acquisition of Time Warner Cable is the most likely deal to be approved given there's no elimination of a direct competitor involved (there are other just as important concerns, but they're easier for Comcast lawyers to argue around and over).

Sprint's the only one trying to eliminate a key competitor just as they're at their most competitive -- the same competitor regulators blocked AT&T from acquiring just a few years ago. Sprint's claim that eliminating a competitor increases competition doesn't appear to be working with regulators any better than when AT&T tried it.

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RadioDoc
Premium,ExMod 2000-03
join:2000-05-11
La Grange, IL
kudos:2

Paid shill

Moffett is just saying what his masters at AT&T and Verizon pay him to say. This deal happens whether they and he like it or not.

jseymour

join:2009-12-11
Waterford, MI

Re: Paid shill

Disagree. Moffett is pro-big-carrier. If even he thinks this deal is DOA, I think there's much better than even odds it's dead.

Jim

Karl Bode
News Guy
join:2000-03-02
kudos:39

3 recommendations

Re: Paid shill

He's actually gotten a little less ridiculous while at this new firm he's started. Like actually acknowledging that you can't raise cable rates indefinitely, etc. If he's carried water for anyone over the years it has been cable.

Sprinter

@72.239.217.x

Re: Paid shill

Instead of a Merger why don't Sonny fix Sprint and make its coverage and data speed on par with the big 2 instead of spending money on T-Mobile. And while he is at it change Sprints name to longevity or something that reflects its real assets - Mega Spectrum / Little coverage.

IPPlanMan
Holy Cable Modem Batman

join:2000-09-20
Washington, DC
kudos:1

2 recommendations

Better than 10%

I disagree with Moffett's prediction.

AT&T was willing to spend $39 Billion to eliminate T-Mobile as a competitor.
As was reported on this website: »Leaked AT&T Letter Demolishes Case For T-Mobile Merger

"For the first time the letter pegs the cost of bringing AT&T's LTE coverage from 80% to 97% at $3.8 billion -- quite a cost difference from the $39 billion price tag on the T-Mobile deal. The push for 97% coverage apparently came from AT&T marketing, who was well aware that leaving LTE investment at 80% would leave them at a competitive disadvantage to Verizon. Marketing likely didn't want a repeat of the Luke Wilson map fiasco of a few years back, when Verizon made AT&T look foolish for poor 3G coverage."

Combine that fact with the poorly received mega-astroturfing campaign AT&T did here in DC (and beyond), and things quickly unraveled.

As a smaller player, Sprint has a much better chance than AT&T did.
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ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Re: Better than 10%

True, but AT&T was also arguing that T-Mobile was a carrier on the verge of death. I don't know if that was exactly true, but it was certainly struggling. Now, T-Mobile is doing quite well, so it's much more competitive than it used to be, a fact that will work against this deal.
78036364

join:2014-05-06
USA

Re: Better than 10%

said by ISurfTooMuch:

Now, T-Mobile is doing quite well, so it's much more competitive than it used to be, a fact that will work against this deal.

If you call LOSING $150 mil per quarter doing "quite well" maybe you're right.
mgamer20o0

join:2003-12-01
Norwalk, CA

Re: Better than 10%

said by 78036364:

said by ISurfTooMuch:

Now, T-Mobile is doing quite well, so it's much more competitive than it used to be, a fact that will work against this deal.

If you call LOSING $150 mil per quarter doing "quite well" maybe you're right.

if they end up with a billion break up fee its easy to keep losing that money to gain subs then slowly back off paying for break up fees if they want.
itguy05

join:2005-06-17
Carlisle, PA
quote:
If you call LOSING $150 mil per quarter doing "quite well" maybe you're right.
Well, Amazon has yet to turn a consistent profit and they are going on 20...

why60loss

join:2012-09-20
Reviews:
·Comcast
·Time Warner Cable
·Verizon Wireless..
said by 78036364:

said by ISurfTooMuch:

Now, T-Mobile is doing quite well, so it's much more competitive than it used to be, a fact that will work against this deal.

If you call LOSING $150 mil per quarter doing "quite well" maybe you're right.

And sprint is doing so much better right?

They also are gaining subs like gang busters right?

And they are the fastest over all LTE network right?

No, then they need to fix that before they even look at T-Mobile because if they can't make softbanks money and the big pile of spectrum work then forget anything saving that pile of trash.

I once had hopes that sprint would fix it's self, doesn't seem like they ever will. Softbank should have gotten T-Mobile instead and then waited for sprint to be on the very edge of death before coming in to get them for bottom dollar for the 2500 band.

I think both sprint and Softbank just don't know how to run a network very well in the USA. They may know japan, but this market they just don't.

robbyglack

@50.243.146.x

so if you are profitable you can merge

interesting here.

unless i am mistaken at&t, directtv, comcast, and twc all consistently reports profits.

its the two companies losing money trying to gain scale that will be rejected.

all three mergers are anti-competitive and should be blocked.
bookertdub

join:2012-10-08
San Diego, CA

1 recommendation

So, You're Saying There's a Chance!

»www.youtube.com/watch?v=KX5jNnDM···ature=kp

IPPlanMan
Holy Cable Modem Batman

join:2000-09-20
Washington, DC
kudos:1

Re: So, You're Saying There's a Chance!

Well played sir. Well played.

Bluefox8

@50.200.87.x

Keep an eye on the prize

The only real merger here is Comcast/Time Warner. The rest are there to keep us distracted and for FCC to leverage with the public. The reason I believe that is because the underlying technology is incompatible in both Att/Directtv and Sprint/Tmo mergers.

I bet FCC will approve the Comcast/TW merger, consider Obama's cozy relationship with their lobbyists. And the other two fake mergers will get rejected and FCC will beat their chest as public advocate. And the public will be satisfied that the government did it's job.

Karl Bode
News Guy
join:2000-03-02
kudos:39

Re: Keep an eye on the prize

I don't think AT&T and Sprint are actively trying to help Comcast get their deal passed, but the end result will probably be as you describe, yes.
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Re: Keep an eye on the prize

I agree with you, but, even though they aren't trying to help, I think it's a safe bet that the timing isn't coincidental. They all know that, if a bunch of mergers are proposed all at once, it increases the odds that at least some will get approved.
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL
Oh, they're all very real, and they're all very bad for everyone but the companies involved. Each and every one of them should be rejected. Furthermore, meaningful ownership limits must be brought back to OTA radio and TV stations. 12-12-12 seemed about right to me. Bring limits back in, and give companies five years to get into compliance.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
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While I think your right, the Dems are shilling for lobbying money.. public sentiment is something to look out for too. It helped kill the AT&T/Tmobile deal. Verizon has had difficulty spinning off more rural telco geographies, and mixed results screwing with NY metro customers. Sprint gets the evil eye from congress on it's merger ambitions. Putting 80% of the country under 1 isp banner and their attitude on CAPS, overages, and net neutrality as well as the cozy relationship wtih #2 telcos is a bigger problem than ATT buying Tmobile, once the public is properly educated on the negative consequences of the merger. If Comcast wanted just to buy the cable-tv rights I'd have no problem, but the last mile should not have an 80% provider be ONE company. Getting the crown jewels of NY and CA makes that possible and against the public interest.

inteller
Sociopaths always win.

join:2003-12-08
Tulsa, OK

Is there money to be made in failed mergers?

I have to wonder if somehow these companies are escaping more expensive taxation by proposing these ridiculous mergers they know will never get approved, letting them fail, paying out the breakup fees with the merging company, and writing that off as a loss to get their tax burden down.
--
"WHEN THE LAUGH TRACK STARTS THEN THE FUN STARTS!"
tabernak

join:2013-08-10

1 recommendation

news flash

Craig Moffett has a 50% chance of being right, says top analyst analyst tabernak.

why60loss

join:2012-09-20
Reviews:
·Comcast
·Time Warner Cable
·Verizon Wireless..

This would be the worst merger of them all

If sprint can't win with softbanks money, 800, 1900 and the 2500 band against T-Mobile, then how is getting rid of them going to fair against AT&T and Verizon?

I am 1000% against the Sprint/T-Mobile deal and in no way shape or form does the customer get better off with less choices and nothing to show for it but higher cost and unlimited data will die.

The AT&T/DirecTV deal is well just no good for customers end of story.

As always though, I do think the Comcast/TWC deal should happen. Only because Time Warner cable will let it's self rot into the next AOL 56k if they don't sell out. The maxx thing is a PR stunt to sell for the highest price per share they could get. The second the deal is blocked, maxx upgrades will end or take 5-10 years to be nation wide.

Big Dawg 23

join:2002-03-27
Northfield, MN

Re: This would be the worst merger of them all

Let unlimited data die. If you need unlimited than you have a problem. I travel for work and download songs from my iTunes Match plus new albums all the time. In addition stream Pandora SiriusXm. I also use Dropbox a lot for work, which has large files. In a month I average 5-7GB. When people say they use 20-30GB it's clear you are tethering or using it as home internet. Get home internet. I pay less for my 10GB and Home 20MB DSL then when I had unlimited data, and not is not a promotion rate it's regular price.

As for the merger, three major companies does mean you have options. In the mix with those there small local companies. If people don't like what a cell companies charges then drop the service. We all surveyed years with out data so drop it with the companies. When companies see deep drops they will make changes to lure customers back.

why60loss

join:2012-09-20
Reviews:
·Comcast
·Time Warner Cable
·Verizon Wireless..

Re: This would be the worst merger of them all

said by Big Dawg 23:

Let unlimited data die. If you need unlimited than you have a problem. I travel for work and download songs from my iTunes Match plus new albums all the time. In addition stream Pandora SiriusXm. I also use Dropbox a lot for work, which has large files. In a month I average 5-7GB. When people say they use 20-30GB it's clear you are tethering or using it as home internet. Get home internet. I pay less for my 10GB and Home 20MB DSL then when I had unlimited data, and not is not a promotion rate it's regular price.

As for the merger, three major companies does mean you have options. In the mix with those there small local companies. If people don't like what a cell companies charges then drop the service. We all surveyed years with out data so drop it with the companies. When companies see deep drops they will make changes to lure customers back.

Don't need unlimited, how ever I won't pay $30 for just 2GB of useless data. I have used 30-40GB a month with out tethering. not every one can get home internet via anything that really works.

If I can no longer get unlimited data, then I will stop using it altogether. Will not pay $10 per GB, because there is so little that can be done with that and I would use the money for other things.

I don't at all get why it's okay for T-Mobile to be part of sprint and not AT&T. I also don't get why so many love sprint at this point even though they still can't seem to do jack right even though they have every thing they should need.

odreian615

join:2006-01-18
Chicago, IL

I know this is off topic, but since this is about mergers

Why haven't grocer mergers not been in the news? Albertston's is about to eat Safeway. Leaving 4 major players, Costco, Walmart, Kroger, and Albertson's to set your food prices as how they see fit

ilikeme
I live in a van down by the river.
Premium
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Sugar Land, TX
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Reviews:
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Re: I know this is off topic, but since this is about mergers

said by odreian615:

Why haven't grocer mergers not been in the news? Albertston's is about to eat Safeway. Leaving 4 major players, Costco, Walmart, Kroger, and Albertson's to set your food prices as how they see fit

Depends on the area. In Texas we have another major grocer that is just as big store wise, but has much better service and better prices than the national guys. HEB.

I also love to go to Costco.

Randalls was originally a local store and was the best in the area but Safeway took them over in the late 90's and they went way downhill. Their prices are terrible now and so is their selection and service. Kroger is nothing spectacular, Albertsons closed here years ago, and I avoid Ghettomart like the plague.
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Eek2121

join:2002-10-12
Newton, NJ
Reviews:
·FreedomPop

Re: I know this is off topic, but since this is about mergers

Yep, most people don't realize that 'national' grocers aren't national. There isn't a kroger, albertsons, or safeway within 100 miles of here. Instead we get wal-mart, shop-right, a&p, weis, costco, and sam's club (owned by wally world), wegmans, whole foods, etc. Disclaimer: I live in the NYC metro area.
nonymous
Premium
join:2003-09-08
Glendale, AZ

Softbankusa

Possible name of combined company.