
SoftBank Close to Announcing Merger Deal for Sprint, T-Mobile - jpelecanos
https://asia.nikkei.com/Business/Deals/SoftBank-close-to-announcing-merger-deal-for-Sprint-T-Mobile
======
grandalf
Mobile carrier consolidation has been one of the major failures of antitrust
regulators. Looking back to the Sprint/Nextel merger, plans and pricing both
declined in customer value severely in the months after the merger closed,
with in-plan minutes going from the thousands down to the hundreds for the
same price.

I would strongly prefer that any consolidation such as this be allowed only if
one of the firms return all of its spectrum licenses to the FCC to be re-
auctioned. It's fine to merge to consolidate infrastructure, but the unfair
aspect of market power is derived from the natural scarcity of spectrum.

The hardware cost of launching a mobile carrier in an urban environment is
falling rapidly, so only spectrum scarcity is preventing upstarts from
disrupting the most lucrative urban markets.

~~~
jessaustin
If competition or "customer value" were actually a goal of FCC, they would
open more unlicensed space, on more useful frequencies, rather than
auctioning, or re-auctioning more rigidly regulated spectrum. This "natural
scarcity" is a property of the deployed technology, not of the universe.

[EDIT:] To clarify, the problem isn't so much the portion of the spectrum
designated for mobile phone use, as the terms under which that portion is so
designated. More of that portion should be available on an unlicensed basis,
or at the very least on a non-exclusive licensed basis. The tiny fractions of
the spectrum that have been available on those terms in recent history have
seen more innovation and less artificial scarcity than more strictly licensed
frequencies have.

~~~
grandalf
> would open more unlicensed space, on more useful frequencies

Which spectrum do you think should be reallocated to mobile use?

> This "natural scarcity" is a property of the deployed technology, not of the
> universe.

What frequencies do you think should be used for mobile voice and data that
are not already?

~~~
wahern
Required reading:

    
    
      https://spectrum.ieee.org/telecom/wireless/the-end-of-spectrum-scarcity
      https://www.salon.com/2003/03/12/spectrum/
    

Basically, the argument is that interference (as understood in spectrum
policy) is a myth. The channel capacity of a frequency band is a limit between
two distinct physical points--it's not some global (or even local) limit. If
you put two pairs of broadcasters and receivers in the same room using the
same band, the laws of nature don't require that the available capacity to
each pair be cut in half. It's the same as it was before for each pair; any
reduction in throughput is merely a limitation of their particular technology.
As sensitivity improves; as algorithms improve; as processing power increases;
you can asymptotically approach your original (uncontended) throughput even as
more transmitters join the fray.

The above articles are fairly old, but their arguments have born out, and the
fundamental science isn't contested. MIMO, beamforming, software defined
radio, and other approaches are now widespread and have permitted orders of
magnitude more _aggregate_ throughput for the same geographical area, even as
the number of transmitters has dramatically increased. And things will only
continue to improve for the foreseeable future.

It's not literally true that interference is a myth. And there are fundamental
physical limitations that we'll eventually bump up against. But those
fundamental limits are beyond the horizon. In the context of historic and
contemporary spectrum policy, interference is indeed a myth.

The above technologies have come to fruition slower than free spectrum
proponents argued. But their argument has always been that as long as
government treats spectrum as scarce and grants legally protected monopoly
rights, there's less market incentive to develop those technologies.

The fundamental argument isn't that we need to add more bands to mobile, but
that we need to remove (or at least loosen) the regulations which artificially
constrain contention. If market participants had to deal with more band
contention, there'd be more incentive to improve their technology to restore
the service quality. As long as you don't have malicious people intentionally
trying to disrupt the system, the argument is that market incentives alone
would spur technological improvements at least as fast as contended usage
grew.

Of course, for the deployed technology at any particular point in time, more
spectrum is better. But the argument here is about optimal long-term policy,
not about the best way to ensure first responders can communicate 6 months
from now.

~~~
grandalf
This is an interesting argument. I'm aware of it but wasn't aware that the
other person was referring to it in his post.

I certainly think it would be interesting to have the FCC allocate a band that
could be used in a less regulated way such as you describe.

It's a very interesting area of SDR and game theory and I've actually put a
bit of thought into how such an ecosystem might work after hearing a talk
about the DARPA Spectrum Challenge.

So I don't disagree with your point at all, and think that the FCC should
allocate some spectrum to this sort of deregulated scenario. Perhaps if it
also required that all protocol and modulation approaches be open sourced that
would help participants to coordinate usefully.

I think that we are far from the limits of physics across most of the network,
but there are likely some congestion patterns in dense areas that create
complex intermod scenarios that would make a system like this somewhat brittle
until the ecosystem evolved to find a cooperative equilibrium of some sort.

In addition to MIMO, I'm interested in things like using TDM and awareness of
harmonic and intermod characteristics to create various emergent latency
"contracts" that correlated with different frequency ranges and time slices,
so that participants that did not need low latency could create significantly
less interference than they otherwise would, and participants could cooperate
based on the data rate and latency requirements of other nearby nodes.

~~~
NotSammyHagar
why would it be different than wifi's 2.4 and 5 ghz bands? those are open, but
don't penetrate far because they are high freq. it works but there's tons of
things making it unreliable.

~~~
rayiner
WiFi works in part because it doesn’t carry very far. The unclicensed band
strictly limits output power, which limits range which limits the potential
for interference.

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Aloha
I'm going to voice an unpopular opinion.

I think this overall is good for consumers, and good for business.

Sprint is woefully under capitalized, neither T-Mo or Sprint have as much PCS
Spectrum (read, they don't have enough) in the largest markets as either AT&T
or T-Mobile. Because of this (and some other factors relating to economy of
scale) neither T-Mo or Sprint is really truly competitive (on performance)
with either AT&T or Verizon outside of a few selected markets.

Our Mobile Phone networks are expensive in the US - but thats largely a
function of how much coverage you have to provide to places where (nearly) no-
one lives.

Figure a cell site costs $1000+ a month to keep it on the air - and Sprint
alone had 20,000 cell sites when I was inside their network last in 2015 - so
20 million a month just to keep the sites on, that doesn't cover backhaul,
CO's, trunking, staffing or any of the other costs to keep a network up.
Verizon and AT&T each have more coverage than sprint does, and 2-3 times the
sites - they also have many more sites that on a good day might see 2-3 subs
roam thru.

~~~
ComputerGuru
> Our Mobile Phone networks are expensive in the US

No they're not. Cell phone bills are one of the only two deflationary
categories in the basket used to determine rate of inflation by the federal
bank, iirc.

That aside, I agree with your view. No one uses Sprint if they have a choice,
it's their (previously) cheaper rates that locked people in (via contract or
via simple inertia).

~~~
sitepodmatt
I've just checked online and this is what I'd take
[https://www.walmart.com/ip/Prepaid-GSM-SIM-Card-Unlimited-
Te...](https://www.walmart.com/ip/Prepaid-GSM-SIM-Card-Unlimited-
Text-500-Minutes-and-500-MB-Data-30-Day-Service/705650864) at $9/mo (t-mobile
network), it's only marginally more expensive than what I'd pay in Thailand,
Malaysia or Vietnam. Enough for my emails, whatsapp, occasional web
browsering. Doesn't seem a bad deal. I think those that want a subsided jesus
phone with the payment rolled into the monthly or insane amount of data are
the ones paying $60+ month.

~~~
tyingq
The picture says $9, but the actual price is below that...$12.99. Confirmed by
adding to the cart.

~~~
sitepodmatt
I think that's the first month including the SIM, then $9/mo thereafter. Still
a good deal and definitely not expensive in my opinion.

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NotSammyHagar
I agree that this sounds terrible. Tmobile is revializing the mobile world. I
love love love all the things that tmobile as been doing. They've not bought
all that low frequency tv white spaces spectrum, there's a good chance they
will continue to force the other major players to improve and lower prices.

They have been ending the horrible contract system, taking customers with
their innvoation. I love being able to use my phone internationally. I don't
see how much good can come of this. sprint is just going to be an anvil around
their feet, with debt service to paying off the sprint owners holding tmobile
back. This is what at&t and verizon want probably.

~~~
NotSammyHagar
replying to my own message, too late to edit it, darn, I meant to say
"revitalizing the mobile world" and "they have _now_ bought that new spectrum"

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blisterpeanuts
What effect would such a merger have on cross-carrier solutions like Project
Fi, which uses both Sprint and T-mo networks? I'm worried that the new
T-Sprint masters would deem Fi to be undesirable competition to whatever
internal scheme they're mulling to join the networks.

~~~
maguirre
I am worried about the same thing. However I think that's only one of the
problems with project-FI.

I feel like once again this project has become another "walking dead" project
:(

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gigatexal
I’d rather the big two were broken up but this merger will give T-Mobile and
sprint all the incentive to price just like the incumbents but give them the
resources to maybe get to network parity so that regardless of what carrier
you’re on you will have the same coverage. Once that’s the case then you could
really put the three against one another and get decent rate in your phone
bill. I’d rather competition did that as well by having many smaller players
but the system isn’t healthy.

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owens99
This is a cultural/incentive problem with big companies. They don't know how
to innovate and are afraid to give up control. So they spend their time and
resources on financial engineering, clinging to the old way of doing business.
Restructuring and mergers are the only way they see forward, because they
would rather increase profits by replacing employees and removing choice for
consumers than by innovating.

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mindslight
Nice! Now I'll be able to move in and out of reception twice as often!

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gok
I’m curious what Deutsche Telekom will do if this happens. They’ve spent most
of their time in the US market signaling that they want to leave, but maybe it
would be a different story when they’re not in distant 4th.

~~~
skinnymuch
T-Mobile haven't been distant fourth for a while. They have been the clear
third for a few years now. Germans wanted out badly before their recent
winnings.

If a deal goes through, it'll be a merger for sure. But also it'll be T-Mobile
as the bigger of the two companies. T-Mobile stock has tripled in the past 5
years. They have a healthy PE ratio. Sprint has more or less remained around
the same spot. Which is now half the market cap of T-Mobile. Sprint is also
having a hard time being profitable.

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baus
I’m curious how this would work technically as the two networks use different
technology. Plus there must be a ton of overlap in the networks in metro areas

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whistlerbrk
No one has mentioned it thus far, but this could be huge for the Essential
Phone, they are now on a real network.

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dzonga
funny how life is. in 2012 Sprint wanted to acquire T-Mobile. Deal goes bust.
T-Mobile gets free funds. Funds expansion. Now T-Mobile in a position to
acquire Sprint.

