
US government approves T-Mobile/Sprint merger - JaimeThompson
https://arstechnica.com/tech-policy/2019/07/its-official-us-government-approves-t-mobilesprint-merger/
======
fossuser
To me this makes a lot more sense than the T-Mobile At&t merger that failed to
go through.

Sprint is a pretty dead brand and provider. They were actually giving away a
year of free service without any obligation (you only had to pay $2 tax/fee)
and people still would not switch to it.

T-Mobile has pushed the other carriers to bring back unlimited plans and
they've separated the phone cost from the plan itself (allowing people to more
easily switch carriers and bring their own phone).

Allowing T-Mobile to get more customers and a stronger position might be a
good thing in order to compete with Verizon and At&t.

~~~
Aloha
Sprint has a pretty solid network in most markets, but they also have a metric
crapton of debt.

What it comes down to, is there isnt enough spectrum to have three fully
competitive carriers. The merger of T-Mo and Sprint will give them a huge
leverage point on spectrum. T-Mo bring 600, AWS bands, as well as 1900 PCS
blocks, Sprint brings 2.6, 900 and 1900 PCS blocks.

~~~
sdinsn
Sprint does have a lot of debt ($33 billion), but AT&T does also: ~$180
billion.

~~~
opencl
They both have debt roughly equal to their yearly revenue, but AT&T has
dramatically better margins. Sprint has repeatedly gone years without a single
profitable quarter.

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reilly3000
US Antitrust law is among its most archaic, even though they are relatively
young. Even the term Trust speaks to an a term that is no longer in common
parlance. As there is discussion about 'breaking up' Facebook and others, the
murkiness of the law is painfully clear.

They should be referred to as competition laws, and they should be plainly
understood and work at preventing and penalizing anti-competitive behavior. De
facto digital monopolies have emerged as they have been freely allowed to act
against their competition in ways that would have never been tolerated in
meatspace.

~~~
mtgx
And such a law and the agency enforcing it need to be a lot more pro-active.
By the time governments decide they need to "break-up a company", the lion's
share of the damage has long been done against both small players (or
potential entrants that never stood a chance) as well as consumers.

This is why although I'm a bit supporter of GDPR and other such regulations, I
think there is some truth in the idea that they also "lock-in" the larger
players, because of 2 primary reasons:

1) the fine/punishment is never significant enough to the point that all of
the ill-gained wealth is entirely wiped out. However, maybe it can't/shouldn't
be fully wiped out anyway, because then we enter into the realm of applying
laws retroactively a bit, and that brings all sorts of other dangers with it.

2) they block the newer entrants from using the same unethical tactics to
effectively compete. However, I don't think this is a good excuse against not
enabling such laws. Getting stuck with a couple of monopolies that can still
be further regulated down the road isn't as bad as everyone stealing people's
data and abusing it for personal gain, etc. Like we saw recently that US
carriers have been selling people's location data to bounty hunters and all
sorts of other shady groups -- all in the name of some extra profit. No, I
definitely think a strong law against such abuses would be much better than it
not existing.

But in an ideal world, the governments would've prevented the unethical
behavior way before it starts giving companies billions of dollars in profit
every single quarter. And then both the rampant abuses for a decade+ and the
monopolies would be prevented from the start.

I've been kind of developing my own "rule of thumb" for noticing which company
is a monopoly/makes too much money in some unethical way. When a company
reaches this step you start seeing it "invest" into all sorts of crazy and
unrelated ideas and markets that have nothing to do with its core business.

When a company has "too much money it doesn't know what to do with" and
prefers spending it on completely unrelated markets instead of improving its
core products/offering better value (huge red flag if it doesn't here), then
you know that company is doing _something_ that makes it way too easy for it
to print money. Maybe it's lobbying Congress for locking out competitors,
maybe it's it bribing government officials to gain contracts, maybe it's them
coercing customers into exclusive deals, and so on. When it gets too easy to
make a lot of money and the competition seems to have no way of catching up,
it's not just because the product is that good.

~~~
neoburkian
To quote the user wbl:

Aside from the transistor, negative feedback, Unix, troff, radio astronomy,
the charge coupled device, cryptography, information theory, what did Bell
Labs ever do for us? [1]

By the standard you set forward, we would have shut down Bell Labs BECAUSE it
started to create these unquantifiably valuable inventions.

Google makes absurd amounts of money by search. Is it unethical to create an
amazing search engine? Would it be better if Google said: "We aren't going to
put money into moonshots, cancer research, laying fiber in Kansas, internet
broadcasting balloons, AI research etc. We are going to take all of the money
and pay it back to shareholders."?

I believe that your proposal, if put into practice, would amount to "we should
destroy products that are successful". What am I missing?

[1][https://news.ycombinator.com/item?id=20512519](https://news.ycombinator.com/item?id=20512519)

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rayiner
Why do people think Sprint is so bad, and what does that say about our
cellular market? It looks like I can get 5 lines for $150/month, with a 50GB
soft-cap and 50GB of hotspot. That's less than half of what I pay for Verizon.

Such a lower-cost alternative should be able to attract customers in droves.
Why can't Sprint?

~~~
misterprime
The US is huge. It's hard to cover with mobile phone and data service.

People fear their phones not working on road trips, or when they go visit a
different part of town. Verizon and AT&T built trust that they will be good
enough, and better than the others. T-Mobile did some great marketing with
their 4G launch and follow up campaigns that built a lot of trust. T-Mobile's
customer service is also extremely good.

The perception of Sprint is that it just might not be good enough. In fact, it
is good enough. A colleague of mine has been using it for the three years I've
known him without real issue.

Sprint's recent $25/mo unlimited deal got me to switch from my $70/mo T-Mo
deal. I've lost mobile hotspot, but the savings are worth it for now and
there's no commitment. I'm only out the $38ish activation fee (both ways) if I
want to switch away from them.

~~~
Aloha
Sprint has a really solid network in most metro areas. Both T-Mo and Sprint
have huge issues with rural coverage, both have to leverage roaming partners
to get real national coverages.

~~~
txcwpalpha
I have T-Mobile and travel for work frequently. A couple years ago I traveled
to one of the largest metro areas in Iowa, only to get off the plane and have
my TMo phone tell me that there was no service whatsoever. After a bit of
research, I found out that TMo did not have any official coverage in the
_entire state_ of Iowa, and only had roaming coverage available through a
partnership with Iowa Wireless (I think it's different now and there is actual
coverage available in IA).

It ended up being fine (roaming was more than enough for my usage), but it did
initially remind me of the feeling when I step off the plane in a foreign
country and have to wait to find a WiFi hotspot to be connected again. It
certainly wasn't what I expected when traveling to an area that's only ~200
miles away from one of the US's largest cities (Chicago).

edit to add: Ironically, TMobile has free roaming + data coverage in almost
every single country around the world, which makes it seem a bit silly that I
can take my TMo phone to rural Indonesia and get data service (which I have
done, with that same phone and TMo plan) but struggle to get it in a place
like metropolitan Iowa...

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Rafuino
Key quote, showing that it's not official yet. "The DOJ's approval is not the
last one T-Mobile and Sprint need, because 13 states and the District of
Columbia sued the companies to block the merger."

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jandrese
How are the towers going to be handled post merger? T-Mobile's GSM based
service vs. Sprint's CDMA service means someone is going to have to win if
they're serious about consolidating spectrum and towers.

~~~
eeeeeeeeeeeee
Maybe they won’t bother until a 5G deployment in the future? The merger will
probably take at least a year, probably longer, to fully integrate anyway.

~~~
jandrese
Is 5G going to be fully converged? I thought the mmwave stuff was converged
but the "4G with some touchups" part that most people will be using the
majority of the time was going to keep the legacy GSM vs. CDMA nonsense?

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vgoh1
We are currently in "merger insanity". I'm wondering how many companies will
be left before this ends?

~~~
kevinreedy
The all new Verizon Chipotle Exxon: Proud to be one of America's 8 Companies

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koolba
Assuming T-Mobile continues their multi-year policy of never raising prices on
existing customers I'm all for this. One stronger competitor to AT&T and
Verizon is much better than one almost competitor and an almost-dead-but-
still-owns-bandwidth one.

~~~
adventured
I agree with the spirit of what you said, however I would upgrade T-Mobile in
that analysis. They're a beast of a competitor without Sprint, and they're
slow-stomping both AT&T and Verizon. Grinding gains persistently year after
year.

They're adding millions of customers per year in the US, nearly all of which
are being stolen from the competition. AT&T and Verizon are sitting on
stagnant wireless businesses, while T-Mobile keeps getting bigger.

Operating income hit $5.4 billion last year (up 100% in three years).

$72 billion market cap, up from persistently losing money and worth just $10
billion seven years ago.

Without Sprint they're on their way to a $120-$150 billion market cap and $10
billion in operating income in the next five years or so. And there's nothing
AT&T & Verizon could do to stop it.

~~~
tipsysquid
I used to think nearly the same way. But consider this systemic risk to
wireless competition: If T-Mobile is not allowed to buyout/merge with Sprint,
and Sprint continues the spiral that they are currently in, there is a
possibility that AT&T and/or Verizon end up with more spectrum in the end.
T-Mobile isn't nearly as capitalized to buy Sprint's premium spectrum on the
open market like the other 2 competitors are.

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teilo
I'm already on T-Mobile. I'm for this mostly because the Sprint network plugs
some significant holes for me in places I travel, like northwest Iowa. When
they put their cross-roaming agreement into effect earlier this year, I
suddenly had coverage all along that corridor. Otherwise, I'm stuck with the
extremely small data roaming allowance they provide.

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jpindar
Meanwhile, tmobile.com has been down (at least intermittently) for more than a
week. Purely coincidence I'm sure.

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burfog
I'm not loving this, but there are far bigger problems. Unless we're preparing
to undo the mergers that made Verizon and AT&T huge, it wouldn't be fair to
stop a couple piddly little companies from merging. Maybe they need to merge
for survival.

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howard941
Awful decision. It won't cut consumer costs. Not even Bork would approve.

~~~
Aloha
Considering I think the choice is Sprint going out of business, they are at
risk of ceasing to be a 'going concern'.

~~~
howard941
What happened?? In 2018 they were near $2 EPS

~~~
stonogo
They forgot how to make money. 2018 was an exception because they profited
from a massive tax cut. They went right back to losing money.

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Paul-ish
Does anything stop Dish from selling that spectrum back to the new company?

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sys_64738
Consolidation is bad as it causes prices to rise.

~~~
icebraining
Unless a consolidation of smaller companies helps them to compete against one
or two giant ones, who would otherwise dominate the market.

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JustSomeNobody
I hate mergers like this, but the option is Sprint goes out of business and
either AT&T or Verizon feasts on their carcass and we _still_ only have three
providers.

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xrd
Matt Stoller has some harsh things to say about this, saying this is only
happening because of Trump's friendship with Masayoshi Son:
[https://mattstoller.substack.com/p/trump-antitrust-going-
aft...](https://mattstoller.substack.com/p/trump-antitrust-going-after-big-
tech)

~~~
jessaustin
The corruption angle is interesting, but it's got to be better supported than
this. Just flatly stating "the goal of the merger is to raise prices" is not
enough. Are there mergers not motivated by that, at least in part? If either
ATT or VZN disappeared in the near future, then this merger could be part of
the chain of events leading to raised prices. Back in the real world, prices
might go up but not because of anything the merged company has done. It's
still number three. This merger is good for consumers, on balance. Not just
for Sprint customers but also for the customers of the hundreds of MVNOs
dependent on Sprint's ongoing operation.

