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How Even a Failed AT&T/T-Mobile Deal Hurts Rivals 51

Posted by Soulskill
from the can't-lose-for-winning dept.
An anonymous reader writes "The attempted merger between AT&T and T-Mobile has fallen on hard times amid antitrust concerns, but there's a potential silver lining for T-Mobile — one that would give them a boost over competitors anyway. Reuters reports that T-Mobile USA would be entitled to a hefty breakup fee including $3 billion in cash as well as spectrum and roaming agreements. 'In a research note, Moody's said that could also lead to a network sharing deal between the two companies, reasoning that it "would make sense given the spectrum that AT&T will have to cede to T-Mobile and the 3G roaming agreement between the two." That would make life especially hard for No. 3 U.S. carrier Sprint, which has been one of the most vocal opponents of the AT&T/T-Mobile deal, going so far as to file a lawsuit. ... Smaller rivals such as MetroPCS and Leap Wireless may be affected even more because T-Mobile is eyeing similar customer segments.'"
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How Even a Failed AT&T/T-Mobile Deal Hurts Rivals

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  • Makes Sense to Me (Score:3, Insightful)

    by gamerdonkey (1129337) on Saturday November 26, 2011 @01:04PM (#38175166) Homepage
    So, to re-summarize this story: Because a deal that would have reduced competition has been blocked, competition will increase. But for everyone, not just AT&T.
  • by mkraft (200694) on Saturday November 26, 2011 @01:08PM (#38175184)

    All that's well and good, but it doesn't change the fact that Deutsche Telekom doesn't want T-Mobile USA. They don't want to run it and are putting the bare minimum into it to keep it going. Since the deal fell through, that means that basically Deutsche Telekom can't sell T-Mobile USA to any of the larger companies (I doubt Sprint would get approval either since it's one of the top 3 companies).

    That means that either Deutsche Telekom will try to sell T-Mobile to one of the smaller companies for less than they would have gotten or Deutsche Telekom will simply break up the assets of T-Mobile and sell them off in bits and pieces. The spectrum T-Mobile already has plus what they'll get from AT&T is pretty valuable. Actually AT&T could end up buying all of T-Mobile's assets, leaving just the company and it's customers behind [cnn.com]. That could end up being worse for T-Mobile customers than an all out buy out.

  • by hedwards (940851) on Saturday November 26, 2011 @01:59PM (#38175396)

    I said the same thing until I got my Nexus One, the advice I was given was that I didn't know what I was missing. And he was absolutely correct about that, I use my phone regularly to do things that I never would have thought about doing. Not to mention being able to do things like check email when I'm just waiting for an appointment.

    Tracking my bus schedules, checking prices and verifying that a shop I want to go is still going to be open if I delay things a bit.

  • by flash2011 (2486260) on Saturday November 26, 2011 @03:07PM (#38175748)

    It annoys me that people keep spouting this FUD, that if AT&T doesn't buy T-Mobile there are no other potential major bidders T-Mobile may break up and sell off assets piece-by-piece or shutdown completely.

    Off the top of my head I can see multiple potential bidders for T-Mobile at the right price (not the AT&T "I am rebuilding my monopoly price").

    For example it would make sense for both Telefónica (which already has a major presence in the Americas [wikipedia.org]) or América Móvil (which also has a major presence in the Americas, with almost twice as many subscribers in Mexico as T-Mobile has in the United States [wikipedia.org]. Both could find strong synergies in buying T-Mobile, up selling additional services to the Hispanic community.

    Vodafone as well has long wanted to use their own brand in the United States (especially since they are only a minority shareholder in Verizon wireless). The could sell their Verizon Wireless stake and use the money to buy T-Mobile.

    It could even make sense for China Telecom as they already plan to launch Wireless Service in the USA next year [capitalvue.com].

    I am sure I am just scratching the surface of potential bidders so please, please stop the "OMG, T-Mobile will shut down if AT&T doesn't buy them" FUD.

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