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Unread 2018-05-22, 02:19 PM   #276
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Can T-Mobile and Sprint Finally Make It Work?

Even after merger talks between T-Mobile and Sprint broke down last November, T-Mobile CEO John Legere never gave up hope. Combining his third-ranked wireless carrier with fourth-ranked Sprint could potentially unleash cost savings worth tens of billions of dollars and create a company with the heft to truly take on market leaders AT&T and Verizon, Legere believed.
But it wasn’t until a few months later that a leaked White House document about the next generation of wireless networks known as 5G gave Legere a new opening to restart deal talks. The product of a National Security Council staffer’s worries that China would surpass the U.S. in developing 5G technologies, the paper proposed creating a government-built network dubbed “The Eisenhower National Highway System for the Information Age.”

Legere had no interest in a nationalized 5G network, but the alarmist rhetoric on the issue could come in handy, he realized. Antitrust regulators had long opposed reducing the number of major wireless carriers from four down to three. But Sprint and T‑Mobile combined would have greater resources to build a 5G system more quickly than either could separately. The argument helped Legere persuade his corporate parent, Deutsche Telekom, and Masayoshi Son—chairman of Sprint’s majority owner, SoftBank—to finally strike a merger deal.

T-Mobile CEO John Legere (R) and Sprint CEO Marcelo Claure pose for pictures on the floor of the New York Stock Exchange in New York.
BRENDAN MCDERMID—REUTERS




“The awareness by the United States of its trailing countries like China and the possibilities of what we could do together … that became kind of the pushing point for this last emphatic push,” Legere told Fortune after announcing the $26.5 billion deal, which would see him remain CEO of the combined company.


Still, some aren’t convinced. “No matter how you cut it, 5G is not a legitimate justification for this merger,” NYU economics professor and telecom expert Nicholas Economides says. New 5G networks are years away, he says, arguing the real justification for the deal is higher prices.
The 5G argument had better be persuasive, because antitrust experts don’t think much has changed in the wireless market since the Obama administration killed Sprint and T-Mobile’s first effort to combine in 2014, as well as AT&T’s 2011 move to buy T-Mobile. Though the carriers say they will compete even more fiercely if combined—and promise not to raise prices—economists say the incentives shift toward a more cooperative dynamic when a market shrinks from four major players to three.

“We’ve heard all this before,” says Maurice Stucke, who tried cases for the Justice Department’s antitrust division and then helped defend Microsoft when it was sued back in the 1990s. “There’s nothing to suggest the division got it wrong the last two times.”
When President Trump came into office with a pro-business agenda, many inferred a lighter touch on merger reviews. But at least so far, Trump’s antitrust regulators have been active: suing to block AT&T and Time Warner from merging, stopping DraftKings and FanDuel from combining, and even moving to protect competition in the market for prosthetic knees by stopping Otto Bock Healthcare from acquiring rival Freedom Innovations.
“It’s always risky to bet that the antitrust division will view merger law differently due to a change in faces,” says David Turetsky, former deputy assistant attorney general for antitrust. Trump’s top antitrust lawyer, Makan Delrahim, “seems like a serious and experienced enforcer,” he adds.

T-Mobile and Sprint have tried to combat that narrative by pointing to a few new entrants, particularly the services from cable-TV giants Comcast and Charter Communications. But in addition to the tiny market share the cable companies currently have, they are also both leasing wireless service from Verizon, not building their own networks, limiting their ability to cut prices or otherwise undercut their spectrum landlord.
That means it’s all likely to come down to 5G. Qualcomm successfully persuaded the White House to block Broadcom’s unwanted acquisition attempt, saying the deal would slow its 5G push. T-Mobile’s Legere sees a similar argument helping him win approval: “We know all of the ways they’re going to view these questions, and the answers are all in the best interests of all parties involved.”
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Unread 2018-05-22, 02:19 PM   #277
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US public seek price cuts from T-Mobile, Sprint merger


US consumers would back a merger of T-Mobile US and Sprint if it drives down prices, creates economic growth and boosts rural wireless coverage, research by HarrisX revealed.
In a survey of 2,000 people aged 18 years and over conducted in the days after the merger was announced, some 59 per cent said they were unsure whether the deal should be approved.
However, consumers cited factors including service improvements, price cuts across the US, better customer service and job creation as factors which would make them “much more likely” to back the deal. Consumers were also keen for a merged company to make good on its pledge to invest $40 billion into its new network and help ensure the US leads the way in 5G by swiftly deploying a nationwide network.
Dritan Nesho, CEO of HarrisX and a researcher in the poll, said the survey shows T-Mobile and Sprint “have a real opportunity” of convincing consumers of the merits of the merger, but cautioned the public is keen for more details of the deal, particularly around “the impact of new technologies like 5G.”
“And, above all, consumers want prices to stay low,” he added.
Indeed, consumers were “much less likely” to back the deal if it reduced choice (and so raised prices), impacted low-income families, decreased special offers, or prevented new entrants setting up shop.
PR campaign
The survey results come as T-Mobile CEO John Legere and Sprint executive chairman Marcelo Claure continue a public relations blitz, seeking to woo consumers and regulators at the Department of Justice (DoJ) and Federal Communications Commission (FCC) in Washington DC.

Politico reported the DoJ initiated its investigation the day after the deal announcement on 29 April, requesting information about phone numbering and number portability across operators.
In early May, Legere noted during an earnings call that early meetings with FCC Commissioners went “very well” and regulators exhibited a “willingness to listen” to the proposal with an open mind.
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Unread 2018-05-22, 02:20 PM   #278
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Boost Mobile founder is against the T-Mobile-Sprint merger: Here's why.


The founder and former CEO of Boost Mobile USA says the proposed T-Mobile-Sprint merger should not happen. Certainly not unless Boost, currently owned by Sprint, and MetroPCS, a unit of T-Mobile, are spun off.
Peter Adderton, who still runs Boost in Australia from his home in Los Angeles, says he’s concerned about the more than 30 million “prepaid” wireless customers who would be consolidated under the new T-Mobile.
Though the distinctions between prepaid and postpaid phone service are getting fuzzier nowadays, prepaid plans tend to cater to more budget-conscious consumers who pay in advance for the service they think they’ll use. MetroPCS, Boost and Sprint-owned Virgin Mobile USA epitomize such brands.
“They’re the challenger brands in the space, and they have the lowest rates, simply because they’re competing with each other so aggressively for prepaid customers,” Adderton says. “Just recently, Boost offered two months of free service for any MetroPCS customer who switched. Only hours later, MetroPCS came out with the same offer. Why would (T-Mobile) do that if they own the two businesses? Why are they going to steal one from the other, literally fishing from the same pond, which is their own pond?”



T-Mobile, the nation’s No. 3 wireless carrier, and Sprint, which is No. 4, agreed to a $26 billion merger in April. But the deal must still satisfy government regulators, which won’t be easy. Critics contend that prices in a post-merger environment would rise and that jobs will be lost.
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Unread 2018-05-24, 11:31 AM   #279
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Unread 2018-05-25, 02:12 PM   #280
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Only 20% Of Americans Oppose T-Mobile/Sprint Merger: Survey


Only 20-percent of American consumers oppose T-Mobile and Sprint’s proposed merger, market research company HarrisX reports, citing findings from its survey conducted with a representative sample of 2,000 U.S. adults in early May, the week of the consolidation announcement. While the level of resistance to the tie-up appears low, many consumers in the country remain undecided on the issue, with 59-percent of the interviewees maintaining they want more information on the matter before making up their minds. Approximately every fifth American supported the merger outright, with those in favor and against the move thus being largely equal in numbers.

When presented with some already publicized arguments cited by both the two wireless carriers and their opponents, the majority of undecided respondents said they support the consolidation, with 56-percent of all interviewees ultimately concluding they would be in favor of T-Mobile absorbing Sprint as part of an all-stock deal valued at $26.5 billion. Whether the actual American public ends up being educated on both sides of the equation remains to be seen but regardless of that outcome, the general public consensus on the matter may be of little import to competent federal regulators, as recently seen on the examples of net neutrality which is being repealed by the Federal Communications Commission despite massive backlash and the fact that the Justice Department is vehemently fighting against AT&T’s attempt to acquire Time Warner even as the deal faces little vocal opposition from the American people.
The majority of interviewees who concluded they would want to see the federal government approve the merger did so largely due to the prospect of 5G, a crucial part of T-Mobile and Sprint’s proposition. While around half of American consumers already heard of the fifth generation of mobile networks, almost none of them realize that the technology will create jobs and spur massive economic growth, with most of them quoting increased wireless connection speeds as its main benefit, as per the same study. T-Mobile and Sprint are hoping to see their proposed consolidation approved by stateside regulators by the end of the first half of 2019.

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Unread 2018-05-29, 01:02 PM   #281
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Former Trump Campaign Manager Advising T-Mobile On Sprint Deal


Former Trump campaign manager Corey Lewandowski is advising T-Mobile on its proposed merger with Sprint, the Bellevue-based telecom giant confirmed in a statement to Politico. He’s providing the service through lobbying firm Turnberry Solutions established by Mike Rubino and Jason Osborne who worked with him on behalf of the Trump campaign until his departure in mid-2016. Mr. Osborne described Mr. Lewandowski’s role in the company’s relationship with T-Mobile as that of an “unpaid strategic adviser,” having asserted he’s been providing such services to the firm in a capacity of “a friend” for more than two decades. Last September, Mr. Lewandowski told Politico he has “nothing to do” with Turnberry Solutions.

T-Mobile hired Turnberry Solutions last year while it was still negotiating with Sprint over a potential tie-up, with that deal later being called off and then on again. The ultimate agreement reached by the duo comes in the form of a $26.5 billion all-stock purchase that would see T-Mobile absorb Sprint and leave the latter’s parent SoftBank with a minority stake in the combined entity. T-Mobile and Sprint said they’re hoping for the consolidation to be approved by the end of the first half of 2019, a timeline that some industry watchers are calling optimistic due to the growingly aggressive antitrust policies enforced by Washington.
AT&T is presently experiencing the results of that state of affairs firsthand, having seen the Justice Department attempt to block its $85.6 billion acquisition of Time Warner through a lawsuit despite the fact that the vertical merger doesn’t eliminate any competition from the market. AT&T previously hired President Trump’s personal lawyer Michael Cohen, having paid him $600,000 over 2017 in exchange for advice on how to communicate with the current U.S. administration as part of a move that its CEO Randall Stephenson later called “a big mistake” and pushed the company’s top lobbyist to retirement over the matter. The President wasn’t aware of any relationship between Mr. Cohen and AT&T, another one of his attorneys said earlier this month.
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Unread 2018-05-30, 03:35 PM   #282
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Does The Sprint - T-Mobile Merger Help Or Hurt AT&T And Verizon?

Great SpeculationsBuys, holds and hopes

Last month, T-Mobile and Sprint entered into a definitive agreement for a merger, after multiple failed attempts. If the deal goes through, it could effectively reshape the U.S. wireless landscape. While the deal would increase industry concentration, reducing the number of nationwide wireless carriers from four to three, it would also create a larger and potentially stronger contender to market leaders Verizon and AT&T. In this note, we take a brief look at what the deal could mean for Verizon and AT&T.

For more details on the carriers and their expected performance going forward, see our interactive dashboards that outline our valuation estimates and forecasts for Sprint and T-Mobile. You can modify any of our forecasts and estimates to see the impact any changes would have on the companies' valuations. Here is more on how institutional investors and private equity firms leverage Trefis technology.

Deal Will Create A Stronger Player From A Network And Branding Standpoint

If T-Mobile and Sprint are able to close their merger, the combined entity would have a deep portfolio of spectrum, including T-Mobile’s recently acquired 600 MHz licenses and Sprint’s 2.5 GHz resources for 5G deployment. Using the combination of lower and higher band spectrum, the joint entity could provide subscribers with faster and more reliable connections, giving them less incentive to switch carriers. By jointly building out their 5G networks, the company could also build out a denser network, while avoiding the duplication of a significant amount of capital expenditures. There could be branding benefits as well. T-Mobile has built significant brand value over the last few years, in contrast with the Sprint brand, which has been viewed in a relatively mixed light by consumers. As the combined entity would adopt T-Mobile branding, with Sprint’s retail footprint also being rebranded to T-Mobile stores, it could help in better taking on the larger two players.

The Impact On Pricing Remains To Be Seen

Sprint’s CEO has indicated that the merger would effectively lower costs for subscribers; the companies estimate upwards of $6 billion in cost synergies, which could allow the combined carriers to offer cheaper service. The two carriers typically have the most price-conscious postpaid subscribers, and it’s possible that they could continue to play the pricing card to retain and grow their base. That said, the increasing market concentration with just three major players is unlikely to incentivize carriers to continue to compete as strongly. Moreover, T-Mobile and Sprint, in particular, have been fierce competitors, bringing down prices and offering a lot of value-add for customers, forcing the larger two players to follow suit. For instance, the two carriers were the first to reintroduce unlimited plans while offering value-added offerings such as bundled Netflix and Hulu connections. With the absence of this competition, it’s possible that wireless companies will be less aggressive with promotions.


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Unread 2018-05-30, 03:35 PM   #283
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Strategy Analytics: T-Mobile Sprint Merger Accelerates 5G with 17% Uplift, Strategy Analytics


BOSTON--(BUSINESS WIRE)--May 30, 2018--The’ Service Provider Group new report, “US Wireless Outlook: T-Mobile/Sprint Merger Accelerates 5G with 17% Uplift” predicts that 5G adoption will speed up in the US with an approved merger of the number three and four wireless operators. Along with Dish Network and the cable companies getting into wireless-Comcast gained over half a million subscribers on its MVNO Xfinity Mobile in the first year, and Charter Communications and Altice USA are working on wireless launches-the competitive wireless landscape in the US is heating up as 5G deployments are on the horizon.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/ho...0530005854/en/
US Wireless Technology Penetration (Photo: Business Wire)
Click here for report: https://www.strategyanalytics.com/ac...with-17-uplift
Susan Welsh de Grimaldo, Director at Strategy Analytics, explains, “Will the Un-carrier become a carrier? We doubt it. The new T-Mobile even as a strong number two player more on par with Verizon and AT&T will remain disruptive and go after growth with its market-leading 5G smartphone positioning using low and mid-band spectrum. With the merger, the new company would be better positioned for a convergence play, growth in automotive and other high mobility/broad coverage 5G use cases, with new strength in wholesale and enterprise and positioning for Network-as-a-Service (NaaS) with 5G network slicing.”
Phil Kendall, Executive Director at Strategy Analytics, adds “The faster 5G deployment and adoption will be the main merger benefit for US consumers, though everything comes at a cost. Operators in three-player markets enjoy EBITDA margins 3-4 percentage points higher than those in four-player markets so a merger on this scale may weaken price competition and increase operator profits.”
Ken Hyers, Director, Emerging Device Technologies comments, “We expect early 5G smartphones in 2019 and 2020 to be very expensive, approaching US$1000, due to their high technical complexity and normal early mover premiums. T-Mobile and Sprint may need to subsidize the first wave of 5G smartphones if they want to bring down retail prices to realistic levels that early mass-adopters are willing to pay.”
Key findings of the report include:
The T-Mobile/Sprint merger will drive 17% uplift of 5G subscribers, with marginal improvement in revenue outlook; While a combined T-Mobile/Sprint would have a stronger national play and spectrum advantage, both Verizon and AT&T are more than capable of responding and managing market share losses; The upside of faster 5G driven by the merger could be offset to some extent by a less competitive pricing landscape and potential for operators taking more profit out of market; By 2023, Strategy Analytics forecasts that the merged T-Mobile/Sprint operations will have outperformed the individual operations by almost 1 percentage point market share of gross additions, 0.5 p.p. subscription market share, and 0.4 p.p. revenue market share. Strategy Analytics anticipates that the subscription market share gains of T-Mobile/Sprint will be felt relatively evenly between Verizon and AT&T. However, Verizon's greater reliance on the postpaid market for its revenue, the market where the accelerated 5G development will be mainly felt in this forecast timeframe, will result in it being marginally more impacted by the merger in revenue terms.
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Unread 2018-05-30, 03:36 PM   #284
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Thanks to 5G, the merger of T-Mobile and Sprint may actually lower plan prices




Let's face it, 5G will be awesome, at least as awesome as the move from 3G to LTE, if not more. It will allow faster connections, way more devices on a tower, and lower the latency to a high-chase game streaming level. Not only that, but analyst Joe Madden has plied us with charts and graphs that say 5G will lower the price per GB of data drastically, to the extent that any anti-trust and monopolistic pricing worries regarding the merger of Sprint and T-Mobile, will be more than offset in savings when the new 5G networks are up and operational.



He also gives plenty of examples with countries like Korea or Japan, that have only three major carriers, and still have more to show for it than others with four or more major carriers, like Germany, for instance. Granted, the average monthly outlay for a user (ARPU) in Korea is $32, and in Japan $41, while Germans make do with $15-$20 ARPU, but at the same time they consume 2-4 times less data per month on average, and 5G is still a distant pipe dream for German subscribers, while Korea and Japan are rolling out those networks as we speak.


Thus, the analyst's conclusion is that the Sprint and T-Mobile merger is unlikely to affect plan prices negatively in the longer run, and we'll probably even have much more GB per month for the same prices we are paying now, to the extent that a lot of folks might ditch their broadband home connection once 5G kicks in.


In the telecom market, next-generation technology does a lot more to reduce prices than any other factor. We need to encourage investment in technology, not create the appearance of competition by forcing weak companies to continue limping along.

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Unread 2018-05-31, 10:39 AM   #285
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AT&T CEO says T-Mobile and Sprint have ‘tough hill to climb’ to get regulatory approval for merger

AT&T CEO Randall Stephenson knows a thing or two about wireless carrier mergers. He was leading the company when it tried to acquire T-Mobile back in 2011, but the transaction fell apart when the regulators expressed opposition and filed a lawsuit to block the deal.

Now that T-Mobile is on the verge of another merger — this time with Sprint, which would combine the third and fourth-largest U.S. carriers — Stephenson was asked about the pending deal on Wednesday at the Code Conference.

Stephenson, who took the helm of AT&T in 2007, said his competitors have a “tough hill to climb.” He didn’t say whether the merger should be approved or not.

“It’s a classic horizontal merger where you’re taking a competitor out of the marketplace,” he said. “But it is a very different marketplace today and there are a number of competitors out there in this space. A new competitor is coming into it every day, so it will probably get a different review than what our deal with T-Mobile received. But power to them, that they get it done.”

In April, T-Mobile announced plans to merge with Sprint after years of on-again, off-again talks. The two wireless carriers expect the merger to close by the first half of 2019, assuming they get regulatory approval.

The proposed $26.5 billion merger will create a more formidable rival to AT&T and Verizon Wireless. The combined company would be valued at $146 billion.

On a conference call with Sprint CEO Marcelo Claure last month, T-Mobile CEO John Legere — who would lead the new company — told reporters and analysts that the deal will create a “pro-consumer, strongly disruptive, revved-up competitor.” He expressed confidence that regulators will see consumer value in the deal and approve the acquisition.
Verizon Communications Chairman and CEO Lowell McAdam, meanwhile, isn’t losing sleep about the potential T-Mobile-Sprint tie-up.

“I think the U.S. has always been a competitive market,” he told GeekWire earlier this month. “Competition will probably be different if they’re together, but it’s still going to be a very competitive market. So we don’t care. It’ll take them two years — a year of approval and a year of integration — before they’re pointed into the wind, if you will. And we’re going to make the most out of those two years.”
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Unread 2018-05-31, 06:39 PM   #286
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NWIDA President: T-Mo/Sprint Merger To Cause ‘Devastation’





Alan Wolf, President of the National Wireless Independent Dealer Association (NWIDA), spoke out against T-Mobile and Sprint’s proposed merger on Thursday, having done so as part of an explicitly outlined cooperation with Peter Adderton, Boost Mobile founder who already argued against the $26.5 billion tie-up last week. In a joint release, the duo asserted Sprint and T-Mobile’s consolidation will lead to “widespread devastation throughout the wireless ecosystem.” The industry veterans are pointing to the prepaid market segment as the biggest issue of the proposed merger, with that space already being dominated by T-Mobile and Sprint who would have no incentive not to raise prices after combining, hence negatively impacting the poorest Americans who statistically use prepaid services the most.
Besides rising prices, the prepaid market would likely suffer from service quality degradation following the tie-up, the pair argues. Approximately 30,000 independent wireless dealers in the country are also threatened with the merger, with the uncertainty surrounding their businesses growing ever greater due to a general “lack of transparency” from T-Mobile and Sprint’s executives, Mr. Adderton argues. Around 300 mobile virtual network operators in the United States are also threatened by the prospect of the merger which would provide them with even fewer choices when it comes to deciding on whose infrastructure to utilize, hence likely raising wholesale prices and their operating costs that they would pass on to consumers. With the vast majority of MVNOs offering prepaid packages, that’s another manner in which T-Mobile and Sprint would negatively affect the country’s poorest consumers, according to the veteran executives.
Mr. Adderton is advocating for a divestment at least one of Boost Mobile and MetroPCS before any tie-up is approved so that some semblance of competition remains in the prepaid market. The Boost Mobile founder urged both the Department of Justice and the Federal Communications Commission to intervene in the matter and ask for such concessions from the third- and fourth-largest wireless carrier in the country. Approximately 50 million Americans use prepaid mobile services on a monthly basis, according to recent estimates. Outside of the prepaid segment, the merger may actually lower the cost per a gigabyte of wireless data, some analysts believe.
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Unread 2018-05-31, 06:39 PM   #287
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Senate Holding T-Mobile/Sprint Merger Hearing In Late June





A U.S. Senate panel will hold a hearing on the proposed merger of T-Mobile and Sprint in late June, Senators Amy Klobuchar and Mike Lee announced. The event is meant to take place on June 27, with its main target being identifying whether the consolidation would truly benefit consumers like the two wireless carriers claim it will, in addition to probing any potential antitrust issues with the suggested tie-up. Previous reports indicated that both Sprint Chief Executive Officer Marcelo Claure and T-Mobile’s head John Legere are likely to appear at the hearing. Mr. Legere would lead the combined company in case of a successful merger, whereas Mr. Claure would move to a supporting role, collect a golden parachute payment, and continue fulfilling his responsibilities at Sprint’s parent SoftBank.
Sprint’s CEO is already on his way out, having been elevated to the position of Executive Chairman in early May. He will formally leave his current role tomorrow, with the CEO position being set to be filled by Chief Financial Officer Michel Combes who joined the Overland Park, Kansas-based firm in January. The proposed merger of the third- and fourth-largest mobile service provider in the country is meant to be an all-stock deal valued at $26.5 billion which would leave T-Mobile‘s parent Deutsche Telekom with a controlling stake of the combined entity. Boost Mobile founder Peter Adderton who came out in vocal opposition of the deal earlier this month previously said he would appreciate a chance to speak with stateside regulators over the matter. Mr. Adderton argues the consolidation would hit America’s poorest the harder as it would eliminate virtually all competition in the prepaid market that T-Mobile and Sprint dominate, whereas AT&T and Verizon already see it as an afterthought, largely due to its poor profit margins.
T-Mobile and Sprint’s consolidation has been on-and-off for years, with their latest failed attempt to combine their operations being in the works in late 2017. At that time, SoftBank was reportedly unwilling to cede control of the combined entity to Deutsche Telekom but the Japanese tech giant had a change of heart this spring. The two are now arguing their combined financial prowess would significantly benefit the country’s position in the global 5G race, allowing them to deploy the next generation of wireless infrastructure in a much timelier and cost-effective manner.
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Unread 2018-05-31, 07:07 PM   #288
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Assessing Another Potential T-Mobile Merger: A Music Service Could Generate Substantial Synergies



Summary

T-Mobile returned to the music space, offering first free TuneIn and then going back to free Pandora.
TuneIn seems to have flopped in its alternative approach to audio streaming.
T-Mobile may simply be making it up to customers. Or it could be continuing to test Pandora's suitability as an acquisition/content partner.
My calculations still suggest a merger, if one was pursued, would generate substantial synergies.
If a wireless carrier wants a merger, Pandora is hands down the best target.



Around the holidays last year, I noted in one of my articles that T-Mobile (TMUS) was offering its customers free music service with increasing regularity and speculated that it could be a harbinger of a new initiative in the music space by the Un-Carrier. Since T-Mobile has just made some fresh moves in this area, I want to keep readers updated and offer analysis on the latest developments.
My Questionable Theory

My original thesis, simply stated, was that there are more synergies between wireless carriers and music services than popularly assumed due to the architecture of wireless networks. I speculated that T-Mobile, which had offered free music through its T-Mobile Tuesdays program for five of the last six months going into December, would continue to do so and at some point, might even graduate to just buying a music service itself for the synergies.
My thesis was, well, not a home run. T-Mobile let the last promo - Pandora (P) - run out and didn't run another for four months. Not my first time being wrong, and I mostly just chalked it up to experience and moved on. But last week, T-Mobile offered another three months of Pandora Premium again, and there was some interesting content suggesting that perhaps T-Mobile is at least kicking the tires on music.
There were three things that made what would appear to be just another Tuesday thanking at T-Mobile a little more interesting. I will briefly cover each, then offer a quick analysis.
T-Mobile's First Music Snub

First was the timing. T-Mobile didn't just offer Pandora, a way of the famously consumer-centered Un-Carrier saying it thinks Pandora's service is worthy of its customers. For the first time, it seemed to say which services it thinks aren't worthy, as well.
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Unread 2018-06-04, 09:36 AM   #289
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Sure Seems Like Trump's DOJ Has No Interest In Blocking the T-Mobile-Sprint Merger


T-Mobile and Sprint agreed to a merger earlier this year that would create a single, massive telecom company and would shrink the already-limited US marketplace for mobile carriers... and it looks like President Trump’s Department of Justice is just fine with that. The government’s top antitrust official hinted Friday that shrinking the market to just three major service providers likely won’t an issue.

According to Reuters, the Justice Department’s antitrust division head Makan Delrahim was asked Friday if his agency would object to the merger on the grounds that it would mean one drop consumer options for mobile service providers from four to three. “I don’t think there’s any magical number that I’m smart enough to glean,” Delrahim replied.


A lawyer and lobbyist who was part of the Trump transition team, Delrahim has had no objection to major mergers in the past. Prior to being nominated and confirmed to the DOJ’s antritrust division, he said he didn’t see AT&T’s $85 billion acquisition of Time Warner as “a major antitrust problem.”
While his statement doesn’t fully commit the DOJ to taking a position one way or another on the T-Mobile-Sprint merger, it does represent a much more flexible position on the matter than the previous administration. Under President Obama, the DOJ drew a hard line on any merger that would drop the mobile market below four major providers.

Bill Baer, the former head of the antitrust division, told the New York Times in 2014, “It’s going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of American consumers.”
Using that position as a guideline, the DOJ blocked AT&T from purchasing T-Mobile in 2011, a decision that forced T-Mobile to become more competitive by offering plans consumers couldn’t get from AT&T or Verizon. The company killed off two-year contracts that locked in consumers, offered to pay off hundreds of dollars in termination fees to encourage people to switch carriers, made unlimited calls and texts standard, and reintroduced unlimited data plans. It didn’t take long for other carriers to make similar offers to prevent T-Mobile from stealing away customers.

Per the FCC, four major mobile carriers—AT&T, Verizon, T-Mobile, and Sprint—account for 98 percent of the total wireless market in the US. Drop that down to just three companies, all in possession of basically equal portions of the pie, and the reason to compete essentially disappears.

Canadians already suffer from this. The nation has three major carriers, all of which have similar subscriber numbers and little incentive to undermine one another. As a result, the country is home to some of the priciest phone bills in the world.

Even with Trump’s DOJ tipping its hand slightly and suggesting there is no problem with dropping to just three major carriers, some—including T-Mobile and Sprint’s competitors—expect there will be at least some challenge to the merger of the two firms.

Earlier this week while speaking at Recode’s Code Conference, AT&T CEO Randall Stephenson said T-Mobile and Sprint will have “tough hill to climb” to complete the merger. “It’s a classic horizontal merger where you’re taking a competitor out of the marketplace,” the telecom head said, though he chose not to share his position on the merger.

Executives at AT&T have previously said the company won’t contest the merger, and Verizon’s CEO Lowell McAdam has gone on record multipletimes to say some variation of “We don’t care” regarding T-Mobile and Sprint. It looks like American consumers are going to have to get ready for the big four to drop to the big three.
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Unread 2018-06-08, 12:30 PM   #290
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T-Mobile/Sprint Merger’s Effect On MNVOs Under Scrutiny



The proposed merger between T-Mobile and Sprint is drawing ever closer to becoming a reality, and the United States Department of Justice is currently in the process of investigating just how the deal may affect smaller carriers like MNVOs, especially those who use T-Mobile and Sprint’s networks. Authorities are worried that the $26 billion merger deal could result in higher prices and other woes for MNVOs, which may then be passed on to customers. The two networks combined reportedly have sway over a grand total of 54-percent of the prepaid wireless market in the United States, counting Sprint and T-Mobile prepaid customers and the customers of MNVOs who use Sprint and T-Mobile networks.

This sort of process is part and parcel of approving any merger between two large wireless companies, but the large portion of the prepaid market and MNVOs held by the two companies makes this one special, and worthy of a bit of extra consideration in that regard. The fact that T-Mobile is the most popular major wireless carriers among the sub-$75,000 income bracket means that it’s a top priority to ensure that this deal will not cause a dramatic uptick in costs. The same can be said of the fact that Boost Mobile, one of the largest prepaid wireless brands under Sprint, counts low-income customers as some 83-percent of its customer base. This means that this deal holds inordinately large potential to see lower-income individuals relegated to lesser data plans, or in some cases kicked out of the premium wireless space entirely.
While changes in plan pricing are certainly not an inevitability, it is quite possible, and it stands to reason that T-Mobile and Sprint would have to get funding from somewhere in order to execute a joint 5G buildout, especially since the two companies have different plans in that regard. Sprint holds a large amount of high-band spectrum that it plans to use to build out a small-cell 5G network, while T-Mobile wants to use network virtualization and other newer technologies to deliver 5G performance over lower-range spectrum bands that can transmit further and go through buildings and obstacles more readily. The two companies combining their spectrum holdings is a major motivator behind the merger.





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Unread 2018-06-11, 09:04 AM   #291
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T-Mobile/Sprint Merger May Have Moved DOJ To Contact MVNOs


The T-Mobile/Sprint merger may have moved the Department of Justice to contact MVNOs, as it’s now been reported that some MVNOs have been reached out to by the division of government, though it’s exactly clear what the communication has been about or how many MVNOs it has contacted. Also worth pointing out is that there has been no confirmation from the Department of Justice that it has been communicating with any of the MVNO companies. Details have not been shared about the conversations that have been had but at least one MVNO has opened up about the DOJ reaching out to it. FreedomPop, a smaller MVNO has reportedly confirmed that it was contacted this week.

Though the conversations could be about anything else, it’s suspected that communication between the DOJ and MVNOs has to do with the proposed merger between the third and fourth largest wireless carriers in the U.S. – T-Mobile and Sprint respectively. This comes just one day after it was reported that the Department of Justice was taking a hard look at the merger between the two carriers and how it would affect mobile virtual network operators. MVNOs are smaller carriers and license coverage and tower use from the bigger four, with some MVNOs belonging to both T-Mobile and Sprint individually.
This shouldn’t come as a surprise as T-Mobile and Sprint collectively have control of just more than half of the prepaid wireless market, which makes it clear why the DOJ might take interest in how a merger of the two companies would affect that market and cause it to start reaching out to those various networks. What these calls to MVNOs will mean for the future of the merger is unclear, and it’s entirely possible that it may not have much of an affect at all, but it’s also being stated that communication on behalf of the DOJ’s part to these MVNOs is looked at as a good thing due to it possibly resulting in finding a resolution that could help MVNOs benefit from the merger instead of them being negatively affected.
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Unread 2018-06-18, 10:00 AM   #292
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T-Mobile, Sprint Preparing FCC Merger Filing Next Week: Report


T-Mobile and Sprint are preparing an official merger filing with the United States Federal Communications Commission, Reuters reports, citing an unidentified document. The third- and fourth-largest mobile service provider in the country will officially request a consolidation approval from the agency on Monday, with their filing being said to be relatively straightforward in nature, requesting traditional discretion on the FCC’s part in regards to the manner in which the regulator will handle their sensitive corporate information. A U.S. Senate panel will be holding its first hearing on the proposed tie-up on June 27, with most industry watchers and analysts agreeing the two telecom giants have a rough road toward approval ahead of them.

While T-Mobile and Sprint claim their combined operations would lead to more jobs and competition in the wireless segment, the deal they want to see done would reduce the number of national wireless carriers from four to three, with some advocacy groups and industry veterans also describing it as “devastating” to the market as a whole; NWIDA President Alan Wolf and Boost Mobile founder Peter Adderton previously argued the merger would completely monopolize the prepaid segment, resulting in increased prices and reduced service quality, thus hitting America’s poorest customers the hardest.
The consolidation proposal launched earlier this spring has been presented in the form of an all-stock deal valued at $26.5 billion which would leave T-Mobile parent Deutsche Telekom with a controlling stake in the merged entity. The two network operators also argued that combining their forces is the only way for them to remain relevant in the emerging 5G segment and push the nation’s largest two carriers — AT&T and Verizon — to deliver even better next-generation services, thus ensuring long-term competitiveness in the industry. While not everyone is convinced by those arguments, some analysts believe a tie-up wouldn’t necessarily raise prices, especially not those attached to a gigabyte of wireless data.

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Unread 2018-06-19, 01:12 PM   #293
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Sprint, T-Mobile Promise “World-Class” 5G In FCC Merger Pitch


Sprint and T-Mobile vowed to deploy a “world-class” 5G network if allowed to merge, having written as much in their Monday consolidation filing with the United States Federal Communications Commission. The third- and fourth-largest mobile service provider in the country announced the tie-up attempt in April, presenting it in the form of a stock-only swap valued at $26.5 billion, but the duo is only now starting the necessary processes for having the merger approved with stateside regulators.

The Public Interest Statement that the FCC already acknowledged receiving and published on its website earlier today, contains a long string of promises surrounding the tie-up attempt, with T-Mobile and Sprint using it as yet another opportunity to argue that their combined operations would be much more conducive to swift deployment of a futuristic 5G network than any individual effort launched by either party, a sentiment that some industry watchers — including former FCC Chairman Tom Wheeler — are skeptical about. Sprint and T-Mobile’s 5G network will “leapfrog” Verizon and AT&T’s next-generation wireless offerings, the two mobile service providers wrote, vowing to commit close to $40 billion to the effort, a figure that’s somewhat smaller than what their two larger rivals are expected to spend on 5G.
Price per gigabyte would also decrease in a market wherein T-Mobile and Sprint operate as a single entity, which is an argument that already has some independent research supporting it but may also simply be a side effect of 5G. The performance gap between mobile and broadband Internet will also be eliminated as a consequence of the merger and rural coverage will improve, allowing millions of Americans to “cut the cord,” i.e. ditch cable service in favor of pay-TV solutions and similar streaming services, the duo argues, adding that the proposed consolidation would also create thousands of new jobs. The FCC is expected to complete its preliminary review of the filing this summer, whereas T-Mobile and Sprint previously said they’re hoping their tie-up to be approved by all competent regulators by the end of the first half of 2019.
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Unread 2018-06-22, 11:10 AM   #294
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Sprint CEO Takes Comfort From Recent AT&T Merger


The recent merger approval between AT&T and Time Warner gives Sprint and T-Mobile confidence that their own merger might be successful, according to Sprint CEO Michel Combes. Speaking for an interview, Combes says that the presiding judge in that prior case has effectively shown judicial understanding that the structure of the industry has changed. That reasoning has also served as an underpinning for the reasons behind the merger attempt by the two carriers. The service providers argue that a merger will bolster the new company against increasing competition in the cell service industry. That’s included projects from companies that are typically outside of that market such as Google, Comcast, and Facebook. Meanwhile, a merger will also allow for more efficient growth and investment in the upcoming switch to 5G networks.

However, the potential tie-up has not gone without scrutiny from the Department of Justice (DOJ), which may also be looking to reinforce its stance on mergers following its loss in the AT&T case. The DOJ has reportedly already been in contact will smaller carriers working off of the network equipment and licensing bands from their larger counterparts. There’s no information available about what those discussions might encompass and it isn’t clear whether or not the department will seek to halt the merger entirely. However, some of those MVNOs have confirmed that contact was made and that does seem to indicate that the possibility is at least up for consideration. If pursued, that could result in limitations being placed on the merger or it could ultimately be approved or disapproved outright but a decision on that may take up to a year to be reached.
In the meantime, the nation’s third and fourth largest carriers have continued to actively address their employees amidst worries about the number of jobs that might be lost within both companies following a merger. Sprint, for its part, has organized a series of tours which feature talks from Combes concerning the importance of scaling the company to meet competitive growth. That’s reportedly been tempered with statements about the importance of employment figures in areas where the company has a strong presence. For now, those talks have taken place in Dallas, Detroit, Philadelphia, and Washington, D.C.
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Unread 2018-06-28, 03:10 PM   #295
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Analysts Believe Odds For T-Mobile & Sprint’s Merger Are Increasing


One Wall Street research firm believes that the odds for the merger between T-Mobile and Sprint are beginning to increase. Making it more likely that it will go through. The two companies were up on Capital Hill on Wednesday, testifying before Congress about the proposed merger. This research firm spoke with some people in Washington DC (names were not disclosed of course) and became more optimistic that the deal will go through. This is likely due to how John Legere and Marcelo Claure answered the questions that Congress asked. Also, the recent AT&T and Time Warner merger going through is definitely weighing in here.

While the likeliness of this deal going through is starting to increase, the two companies are starting to have to answer more questions about how the deal would affect prepaid. Between Sprint and T-Mobile, they have the biggest prepaid carriers under their umbrella – MetroPCS, Boost Mobile and Virgin Mobile. And it’s currently unclear what would happen with those brands, whether they would be rolled into one brand, or gotten rid of altogether. The Wall Street Journal recently reported that the New York Attorney General is investigating the effects that this merger could have on the prepaid market. It also reported that dozens of other State attorney’s general are also looking into the matter.
The merger between Sprint and T-Mobile is going to be put under quite a bit of scrutiny by regulators and Congress, which is not a surprise to anyone – including Sprint and T-Mobile. But both companies are still expecting the deal to be approved and close within a year. The argument for combining Sprint and T-Mobile is to be able to better compete with AT&T and Verizon in the 5G space. Seeing as AT&T and Verizon are both about twice the size of Sprint and T-Mobile, combining the companies would take the US from having two big carriers and two smaller carriers, to having three big carriers that can compete better with each other. Which is going to be good for the consumer.

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Unread 2018-06-28, 03:57 PM   #296
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Sprint, T-Mobile defend proposed tie-up before U.S. Senate panel
















WASHINGTON (Reuters) - T-Mobile’s planned $26 billion acquisition of rival mobile phone carrier Sprint Corp would add jobs and would not hike prices, top executives of the two companies testified before a U.S. Senate panel on Wednesday.



FILE PHOTO: A smartphones with Sprint logo are seen in front of a screen projection of T-mobile logo, in this picture illustration taken April 30, 2018. REUTERS/Dado Ruvic/Illustration


The two companies, which are the third- and fourth-largest wireless carriers, agreed to the all-stock deal in April, which they said would create thousands of jobs and help the United States beat China to creating the next generation 5G mobile network.
The chief executive of T-Mobile, John Legere, told a Senate Judiciary Committee panel that oversees antitrust issues that much larger rivals AT&T Inc and Verizon Communications Inc have advantages that the two companies cannot address without combining.


“They are much larger and more diversified, so they have a significantly better cost structure,” Legere said. “Verizon and AT&T have scale and asset advantages that even our best offerings cannot overcome.” He said it would be the “complete annihilation” of the brand if a combined T-Mobile-Sprint acted like its larger rivals.
Sprint Executive Chairman Marcelo Claure said the company had lost over $25 billion in the past decade, its headcount fell from 40,000 in 2011 to 30,000 in 2017, and it has $32 billion in debt even as it became net income positive last year for the first time in 11 years.
“We still are unable to spend at parity with Verizon and AT&T, much less catch up to their previous investments,” Claure said.
The U.S. Justice Department and the Federal Communications Commission are reviewing the merger.


Gene Kimmelman, president and chief executive of Public Knowledge, an advocacy group for an open internet and affordable communications tools, told the committee that approving the merger “rather than forcing (T Mobile) to fight for customers, will eliminate the combined company’s need to disrupt the market and create an incentive to maintain the existing market structure.”
Kimmelman said countries that have gone from four to three wireless carriers have higher prices for wireless service, citing Canada as an example.
Senator Amy Klobuchar, the ranking Democrat on the committee, asked if the combined carrier could hike prices to just below what AT&T and Verizon charge and retain customers.
Claure denied that. “In order for us to gain market share with the new network that is going to be built we’re going to have to lower prices in order to be able to fill that capacity,” he said.

Legere said the combined company would hike overall employment, but acknowledged that there would be a reduction of 3,295 full-time retail jobs through 2024, along with other part-time and distributor job losses even as he rejected union forecasts of much larger losses.



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Unread 2018-07-02, 02:38 PM   #297
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Should regulators approve T-Mobile and Sprint merger?


So far, thinking of all the pro’s and con’s in the decision to approve the T-Mobile, Sprint merger, there is one over-riding reason to approve. Let me explain.




Something interesting happened when T-Mobile and Sprint filed their intention to merge with the FCC. They said a merger would strengthen them and let them compete head to head with competitors like AT&T Mobility and Verizon Wireless. But wait. I thought they already were successfully competing. So, are they, or aren’t they?

The truth is somewhere in the blurry middle. Over the last five years, both T-Mobile and Sprint have gone through major changes. Five years ago, both of them were smaller and insignificant competitors in the wireless industry.

CEO John Legere saved T-Mobile

Then John Legere was brought in as CEO of T-Mobile and things started to change. When he stepped in, the company was crashing and burning. It missed the changeover from 2G to 3G and they were suffering because of that judgement call.


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Legere set the company on an immediate upgrade. They skipped over the 3G hurdle and went right to 4G. He created the image of a smaller competitor getting back on track. It took years for the company to improve its network to the current level. But they have done a good job and had success over the last several years.

Sprint has lots of wireless data spectrum
Sprint was also struggling. Masayoshi Son, CEO of Softbank acquired the majority of Sprint. He is very successful in Japan and wants to expand his reach to the USA. His intention after acquiring Sprint was to also acquire T-Mobile, but US regulators made it clear that would not happen at that time.


Next, Masayoshi Son hired Marcelo Claure to be CEO of Sprint and the company spent the last several years trying to compete in the US. They have had a few high points which led us to think they were turning the ship around, but they simply could not catch the long-term growth wave they were chasing.

However, Sprint does own lots of wireless data spectrum, which is like gold in the wireless industry.



Bottom line, T-Mobile is a great marketer, but has very little spectrum. Sprint is not a great marketer but has loads of spectrum.

That’s why these two companies think merging makes sense. They would roll marketing and spectrum together and create an effective third place competitor.

T-Mobile, Sprint merger would combine marketing and spectrum
That makes sense. So, why should regulators let them merge?


Simple. If they don’t merge, as the industry moves ahead into the new 5G future, the industry would have four competitors. Two strong and two weak. AT&T and Verizon compared to T-Mobile and Sprint.

If they do merge, the industry will have three competitors, but they would all be strong. I know regulators would prefer to have four competitors. That made sense five or ten years ago when the wireless industry was a different place.

5G is main reason T-Mobile, Sprint merger makes sense

Today the move to 5G is expensive and unstoppable. We need as many viable competitors as we can get going forward. As much as both T-Mobile and Sprint have improved over the last several years, they are not in a strong position for the transformation to the coming 5G world.


What about all the bluster over the last five years coming from T-Mobile about how they were a rapidly growing giant who is taking no prisoners? Well, that’s just marketing talk. The truth is, they have been growing and are much stronger today than ever before, but they are not ready for the move to 5G on their own.

If we were not moving from 4G to 5G, the need to merge would not be as great. However, it’s that move to 5G that is the whole point. Neither T-Mobile or Sprint have the size or scope to remain a competitive force going forward if they do not come together.

Coming together will mean there will be three strong competitors in the wireless industry. Three strong companies are better than two strong and two weak competitors. That makes the most sense for the industry.

Wireless changing with Project Fi, Xfinity Mobile, Spectrum Mobile, Altice Mobile

Today, there are also more competitors, and even more are joining. Google Project Fi and Comcast Xfinity Mobile are already in the marketplace. Next will be Charter Spectrum Mobile and next year Altice Mobile. Plus, I expect even more companies will enter this space.


So, the wireless industry is strong and getting stronger all the time. And we want to continue to have all the competitors actively battling in the marketplace. Throwing a wrench into the mix is not in anyone’s best interest.

Deciding whether to approve a merger or not is a complex decision. I would say, based on what I hear so far, it makes sense that these two companies get together. If there are any competitive concerns, they can be addressed during the process.

Wireless is the center of the universe moving forward. We want to continue to let the industry grow and transform as it always has done. In the case of T-Mobile and Sprint, the move to 5G is the main reason to let these two companies merge. It will be better for them and it will be better for the marketplace to have three strong competitors rather than two strong and two weak ones.
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Unread 2018-07-02, 02:41 PM   #298
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There’s only one way for T-Mobile/Sprint to satisfy regulators


If T-Mobile and Sprint try to sell the merger as a simple combo of minor wireless carriers to an antitrust-happy DOJ, even Corey Lewandowski will be powerless to help.




CEO of T-Mobile US Inc. John Legere, Executive Chairman of Sprint Corporation Marcelo Claure and Vice President of Technology with the Systems Architecture & Client Group at Intel Corporation Asha Keddy are sworn in during a hearing before the Antitrust, Competition Policy and Consumer Rights Subcommittee of Senate Judiciary Committee June 27, 2018 on Capitol Hill in Washington, DC. [Photo: Alex Wong/Getty Images]


T-Mobile’s colorful CEO John Legere had a busy Wednesday. He appeared before Congress, energetically making the case for his company’s proposed $26 billion merger with Sprint.

And later in the day he was seen at one of President Trump’s properties, the Trump International Hotel just blocks from the White House, hanging out with his new influence-peddling buddy, ex-Trump campaign manager Corey Lewandowski. Later, Legere got in one of the elevators and went up, an action that isn’t possible without a room key, points out journalist Zach Everson.
Zach Everson
@Z_Everson





With a merger pending that’ll need government approval, T-Mobile’s CEO John Legere is back at the Trump Hotel DC. Also Corey Lewandowski is here. And Lewandowski just went over to Legere’s table and they chatted. (Verified with my own eyes .)
5:48 PM - Jun 27, 2018

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How times change. During a stay at a Trump property in 2015, Legere got annoyed with the noise of street musicians outside his room and tweeted to Trump about it. Trump fired back: “T-Mobile service is terrible! Why can’t you do something to improve it for your customers. I don’t want it in my buildings.” The diva spat ended with Legere angrily announcing he was checking out of Trump’s hotel. That was back in 2015, before Trump became something more than a C-level celebrity.

Flash-forward to 2018 and Legere is praying that the Department of Justice or the FCC won’t block his company’s coupling with Sprint. It’s the biggest sell of Legere’s professional life.

By retaining Lewandowski, whose main service consists of arranging access to the president, T-Mobile signaled its willingness to play the influence game by Trump’s rules.

MAKING THE CASE


When Legere and Sprint executive chairman Marcelo Claure appearedbefore the Senate Judiciary Committee’s antitrust panel on Wednesday, their main goal was to leave the impression that the merger will create jobs and not harm consumers. (Such hearings are important inasmuch as Congress oversees the FCC, which, with the DOJ, must green-light the deal. But they’re more of a formality, a dog-and-pony show that allows lawmakers to appear tough on big corporations on the evening news back home in their districts.)


Ultimately T-Mobile and Sprint must convince the FCC that the deal is “in the public interest,” meaning it will not harm competition in the wireless market. They have to show the Justice Department that a merger would not constitute antitrust and ultimately make things tougher for wireless consumers.

This will not be easy. The merger of the #3 and #4 carriers in the wireless market will inevitably cause redundancies in the two companies’ workforces. Legere seemed to acknowledge this in the Senate hearing. The number of jobs eliminated would be about 10,000, as the two companies combine whole departments, call centers, network operations, and the like. The only real bright spot on the jobs front is the possibility that the combined company will bring some jobs back to the U.S. from foreign call centers.

The question of competition is also a sticky one. As a smaller wireless carrier it wasn’t surprising when T-Mobile attacked the industry’s twin titans AT&T and Verizon by offering lower-priced service and by dispensing with usurious long-term service contracts (the other wireless carriers were forced to follow suit). T-Mobile reveled in that insurgent role, dubbing itself the “Uncarrier” and launching a series of device and service freebies and discounts. Legere cast himself as the living embodiment of his company’s place in the market, dressing himself up in the bizarre (magenta and leather) accoutrements and attitude of a rebellious corporate man-child. He attacked AT&T and Verizon in videos and tweets, referring to them as “Dumb and Dumber” and “the pricks.”

Legere, decked out in his magenta plumage at the witness table, assured lawmakers that T-Mobile would still be head-to-toe rock-and-roll even after the hitch-up with Sprint.

“When we do this, AT&T and Verizon will be forced to react and follow our lead or we will happily take their customers and give them more value and better price,” Legere said. “Trust me, the New T-Mobile will not stop, we will be relentless.”

TWO OUTCOMES


That played well, but there’s good reason to skeptical of Legere’s words. Consumer advocacy groups like Free Press suspect that reducing the wireless market from four to three competitors will ultimately lead to less innovation, poorer service, and higher prices. They may be right.






“In recent years, T-Mobile and Sprint have each exerted important competitive pressures on the wireless market, pushing each other and AT&T and Verizon to do things they otherwise wouldn’t — like offering uncapped data plans again and dropping burdensome contract requirements,” said Free Press CEO Craig Aaron in a statement. When T-Mobile is no longer a David and looks more like just another Goliath, and when Legere’s job as CEO is to maximize returns to his shareholders, why would T-Mobile continue to act like the market’s freewheeling underdog?

Wireless industry insiders see it differently. It is a fact that T-Mobile and Sprint are small players in a wireless market where being small makes it hard to survive. In the first quarter of 2018, Verizon had 151.5 million subscribers, AT&T had 143.8 million subscribers, T-Mobile had 74 million, and Sprint had 53.6 million. AT&T and Verizon, being larger, benefit from economies of scale in ways T-Mo and Sprint cannot. They buy more network equipment, for instance, but at lower prices. In the end this results in less overhead per subscriber served, which translates into better margins.

As subscriber counts grow, these advantages only increase. And since the market holds only a finite number of subscribers, this necessarily hurts the smaller players, which have to pay more to lure subscribers away from the big guys. Sprint’s Claure told members of Congress on Wednesday that his company, standing alone, is having trouble breaking even.

Which view will more closely match reality a year or two after a merger? In reality both will likely prove true. The merger will likely degrade competition in the wireless space over time, but it will also likely create a stronger single company with a much better chance of survival. The new company would instantly be roughly the size of Verizon and AT&T, with a subscriber share of about 29%. A period of “rationalizing” the two companies’ redundant people, facilities, and technology (The companies have said that $40 billion in “efficiencies”) could result in a more efficient and competitive company. What we don’t know is the balance of the two effects.

A CHANGING WORLD


One expert told me that if the deal is framed as a pairing of two of the four national wireless carriers, it has little chance of making it past the regulators. It’ll set off antitrust alarm bells all over the Justice Department, the person said. This at a time when the Trump administration is trying to make a point of being tough on antitrust issues during a season of widespread consolidation in many industries.

That’s why Legere and Claure have been trying to describe the combined company as a new kind of entity that sells not only wireless service, but potentially home broadband service and a host of media in the future. Becoming that kind of company was the thinking behind AT&T’s recent acquisition of the media giant Time Warner. A combined T-Mobile and Sprint will very likely aspire to sell new kinds of broadband service like fixed wireless service for the home. Sprint owns a treasure trove of 5G wireless spectrum. That combined with T-Mobile’s considerable 5G spectrum holdings will pave the way for those.


Moreover, the new company will not just be competing with the other national wireless companies (AT&T and Verizon), but rather with any company that sells wired or wireless broadband and, increasingly, internet TV service over the top. T-Mobile has already telegraphed an interest in over-the-top video with its acquisition of Layer3 TV in late 2017. This could mean Comcast, Charter, Frontier, and Century Link–companies that are increasingly making a living by selling broadband service.

During the hearing, Senator Amy Klobuchar (D-Minn.) said she was skeptical that the combined T-Mobile and Sprint would be forced to raise prices for consumers after they incurred all the costs of merging and refocused efforts on beefing up their wireless networks. But she may have framed the question incorrectly. Barring any disastrous cultural implosion as the two companies merge, the pairing is in fact very likely to create “synergies” and push down network upgrade costs and operating costs. It would be surprising to see the new company immediately raise wireless charges after the completion of the merger and the establishment of the new brand. The thing to be afraid of, I think, is a gradual evolution toward a company that looks and acts like AT&T and Verizon.

I for one look forward to seeing Mr. Legere on a black and magenta stage, rock-and-roll blaring, paid T-Mobile employees cheering wildly, only to announce a half-percent increase in shareholder dividend or a bold new wireless plan that throttles download speeds at 10GB per month. If T-Mobile and Sprint are allowed to merge, Legere’s rebel patter will start to sound even more hollow than it already does.


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Unread 2018-07-02, 02:45 PM   #299
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Six Ways The T-Mobile-Sprint Merger Will Affect You





Successful CIOs, CTOs & executives from Forbes Technology Council offer firsthand insights on tech & business.

Telecommunications has changed a lot over the last the last decade. Now, access to telecom services seems to be everywhere. However, with only a handful of distinct companies, competition is fierce. Now that Sprint and T-Mobile are merging, the pool of providers has shrunk even more. What will the effect be on the market and on the consumers?


We asked members of the Forbes Technology Council for their thoughts on what this merger means for the industry overall. While the reviews were somewhat mixed, it seems inevitable that developments will happen faster and there will be both gains and losses for consumers.

1. Less Overall Value
When T-Mobile was a smaller company, it had to offer attractive pricing for customers to compete with other telecom giants. Now that it's gotten bigger and became a giant in its own right, I expect less attention to customer needs and more attention to financial results for better stock performance. - Michael Fimin, Netwrix Corporation

2. Increased Growth

The merger of these two telecommunication giants has its advantages and disadvantages. On the one hand, it can be a cost-effective method to fuel expansion and increase growth, diversify the companies and lead to an increase in research and development. On the other hand, the merger can lead to monopoly power and higher prices for consumers as well as further dissociation to communicate and coordinate. - Alexandro Pando, Xyrupt

3. Faster 5G Expansion

With their combined bandwidth, we should expect a faster rollout of their 5G internet. The expansion of faster internet will provide better education and remote job opportunities for those in areas that may be stuck with slow speeds and high prices such as rural areas. As someone who has a fully remote workforce, I'm always championing faster-speed internet rollouts. - Thomas Griffin, OptinMonster

4. Fewer Options

It boggles me that antitrust regulators are even considering a merger of this caliber. There are only four wireless choices right now when you overlook discount services that are tethered to and serviced by the major carriers: AT&T, Sprint, T-Mobile and Verizon. Reducing this number to three creates a wireless services industry that reminds me of what led up to the Bell System breakup. - Michael Gargiulo, VPN.com

5. More Added Value

The potential merger between T-Mobile and Sprint will have a resounding effect on the telecommunications market. With the race for 5G being the finish line for a variety of telecom companies, this now means that it's likely that all providers will be very competitive to gain market share in addition to providing more added value. A golden age of telecommunications is right around the corner. - Donald Hawkins, CitySmart

6. Less Competition

AT&T and Verizon will feel the competition since this newly merged entity will be playing on a level field with the big two. However, at the same time, there will be no competition for tier two, where T-mobile and Sprint were. So, customers can expect to get lower prices from AT&T and Verizon as compared to their current prices but slightly higher prices for the new entity as compared to T-mobile's or Sprint's current prices. - Vikram Joshi, pulsd
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Unread 2018-07-04, 06:02 PM   #300
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Sprint’s Huawei Ties Threaten T-Mobile Merger: Report





Sprint’s ties to Huawei may threaten the wireless carrier’s proposed merger with T-Mobile, Bloomberg reports, citing a copy of a letter signed by various House Representatives meant to be sent to Treasury Secretary Steve Mnuchin next week. The authors of the letter are still seeking additional signatures to raise concerns about relations between Sprint and China’s largest smartphone manufacturer which the U.S. government effectively prevented from doing large-scale stateside business on numerous occasions, most recently this January when it pressured AT&T into dropping its planned retail partnership over the Mate 20 series of Android smartphones. The letter has hence been circulating the House in recent days but the number of signatures it amassed remains unclear.
The lawmakers in question demand a “full and robust national security investigation” into Sprint, its Japanese parent SoftBank, and their dealings with Huawei. As both Sprint and T-Mobile are owned by overseas entities, their proposed $26.5 billion consolidation must be greenlit by the Treasury Department’s Committee on Foreign Investment in the U.S., in addition to needing approval from all other regulators that have jurisdiction over big business tie-ups in wireless – the Department of Justice, Federal Communications Commission, and the Federal Trade Commission. President Trump also has the powers to personally block the deal and is likely to consult with CFIUS over the matter later this year.


Both T-Mobile and Sprint claim their merger would create jobs and additional competition in the wireless industry despite reducing the number of direct rivals in the sector, pointing to 5G as a segment in which the two companies can’t directly take on Verizon and AT&T on their own, which goes against their previous sentiments, as previously pointed out by former FCC Chairman Tom Wheeler and a number of industry analysts. Should the tie-up be approved, T-Mobile parent Deutsche Telekom would end up with 42-percent of the combined entity, whereas SoftBank would be left with a 27-percent stake, with the remaining ownership being publicly traded.


Sprint said it’s confident its merger won’t be blocked on national security grounds. The letter that will soon end up on Mr. Mnuchin’s desk specifically mentions SoftBank’s collaborative efforts with Huawei on 5G technologies which the duo formalized with a cooperation agreement signed last November. While Sprint agreed to eliminate Huawei-made equipment from its operations in 2013 so that SoftBank is allowed to buy it, the mobile service provider violated that agreement, the letter alleges. Huawei’s long history of issues in the U.S. is hence set to receive yet another episode in spite of the company’s frequent protests that its ties to Beijing are overblown and national security risk accusations completely baseless.
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