03-20-2011, 04:41 PM
03-20-2011, 07:44 PM
Wow.. I heard Sprint was in the running to buy em but i guess not. This isn't good news for T-Mobile's customers that's for sure.
03-22-2011, 07:40 PM
The real issue is about the concern of one giant monopoly forming out of this. And under the current administration, I think the FCC is probably gonna say no to "AT&T-Mobile": http://www.cultofmac.com/why-the-fcc-may-block-att-mobile/87683
AT&T’s proposed $39 billion acquisition of T-Mobile would result in new efficiencies and economies of scale. It would enable the provisioning of more and better services at lower cost than the two companies could achieve separately.
And that’s exactly why the Obama administration may block it.
While the Applesphere is obsessing over whether the merger will be good for the iOS platform (it would be, but not for awhile), a surprising lack of concern is being expressed for the possibility of merger denial. I think there’s a very good chance it may not be approved by the Federal Communications Commission (FCC) or the Department of Justice (DOJ).
After eight years of the Bush administration, which was one of the most lenient in history regarding huge mergers, and two years of the Obama administration during which time big mergers have been approved because of circumstances not present in this case, we find ourselves forgetting that the government can and does block these kinds of things.
Don’t get me wrong — AT&T has a lot of points in its favor. (Full disclosure: My wife works for a division of AT&T.)
AT&T is one of the world’s largest campaign contributors and deep-pocket lobbyists. The company had 93 lobbyists and spent $15.4 million on lobbying last year alone. AT&T is a politically powerful company with a lot of friends in Washington.
Also: The company is very good at convincing regulators to approve its mergers. And this one is no exception. AT&T is already planning to offer up huge chunks of its subscriber base for divestiture to placate skeptical regulators and generally do whatever it takes to get this thing approved. They know any final deal will be the product of intense negotiations, and they’re ready to negotiate.
Why the Deal May Be Denied
Wall Street and others analyzing the proposed merger are looking at traditional issues like competition and pricing. The merger would bring together the number one and number three carriers. Note that only four major carriers really matter in this calculation.
Competition is preserved in a non-monopoly market because it enables companies to put pricing pressure on each other. What’s relevant in this merger is that AT&T would be acquiring (i.e. eliminating from the market) the lowest-priced carrier – the one applying the most pricing pressure on the other three.
The government will also scrutinize consumer cost-benefit, and a host of other issues related to anti-trust and market issues. But let’s be clear: There is no way to separate the politics from the decision-making process.
I don’t care what the FCC’s and the DOJ’s mandates are, I can assure you that the Obama administration will consider this merger’s impact on jobs — the one issue that will largely determine whether the president gets re-elected or not. AT&T predicted that it will take the government up to full year to make their decision. By this time next year, the 2012 presidential campaign will be fully under way.
The AT&T-Mobile merger is projected to save the companies $3 billions per year. As in all mergers, such savings come in the form of new efficiencies. And the word efficiency is just another way to say more services provided by using fewer employees and less equipment. Less equipment means fewer employees employed by the companies that make that equipment.
Normally, efficiency is good. Efficiency is the engine of a competitive economy. Efficiency is good for growth, which is normally good for incumbents in Washington. But in a jobless recovery, just before a make-or-break election where the number-one issue is jobs, efficiency is not going to be very popular.
AT&T employs about 294,600, and T-Mobile about 36,000 for a combined total of about 330,600 employees. If merger efficiencies result in the loss of, say, just 10% of the newly combined workforce, we’re looking at the loss of some 33,000 jobs at AT&T-Mobile alone. Efficiencies in equipment and external services mean fewer employees needed at companies that build towers and telecom equipment. Most of these layoffs or non-hires would take place before the election, affecting employment numbers. (Please note that I’m making these numbers up. Nobody knows how the merger might actually affect jobs. In general, however, most mergers significantly reduce combined headcounts.)
Speaking of jobs: It’s useful to remember that both the FCC and DOJ are headed by Obama appointees that will lose their jobs if Obama is not re-elected. Also remember that when Obama was a candidate, he promised to “reinvigorate antitrust enforcement,” a promise he has yet to realize. Denying the AT&T acquisition of T-Mobile would enable him to check off this accomplishment as a promise fulfilled.
Instead of asking “Why would the Obama administration block a merger that reduces both competition and jobs right before a make-or-break election year,” instead ask: “Why wouldn’t they?”
So iPhone fans: Don’t count your HSPA+ eggs before they hatch. This whole thing could be denied.
03-24-2011, 02:01 PM
03-24-2011, 02:11 PM
I hope this goes through, mainly because I'm sick of all those T-Mobile commercials lampooning the masterpieces of advertising known as the "Get a Mac" ads. ;) (Those are the only ads I'd watch for hours.)
03-24-2011, 02:44 PM
I was more pissed at T-Mobile all of a sudden calling their 3G network 4G than i was their blatant copying of the Apple ads. As a Sprint customer, I'm not a fan of this deal.. If it gets approved, Sprint will be in a very distant 3rd place (even moreso than they are now) permanently. I was hoping they'd be the one to make a deal for T-Mo simply because they need the boost in subscribers to be a true contender.
04-03-2011, 12:17 AM
i have T-Mobile does this mean my rates are gunna skyrocket?