

In AT&T & T-Mobile Merger, Everybody Loses - alecperkins
http://gigaom.com/2011/03/20/in-att-t-mobile-merger-everybody-loses/

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bgentry
This makes me want to cry. AFAIK T-Mobile is the only US carrier that actually
allows you to save money by _not_ subsidizing your handset purchase. I saved
$20 off of T-Mobile's already reasonable monthly rates by buying my Nexus One
upfront.

More importantly, the phone is unlocked. When I travel abroad, I can simply
pop in a prepaid SIM card and I'm set. How many phones does AT&T sell that
aren't SIM-locked to their network?

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jdludlow
I left AT&T for T-Mobile years ago, because AT&T's customer service is
terrible while T-Mobile's is excellent. I won't give AT&T my money ever again,
but my choices keep narrowing.

I doubt that I'm alone, which means that Verizon could easily "not lose"
contrary to the title of the thread.

~~~
araneae
I left because Verizon because it cooperated with warrant-less wiretapping (as
did AT&T) and T-mobile did not.

Now I'm screwed because I have a Nexus One so I'm basically locked in. I
bought the phone without a contract but it's not like it works with other
networks.

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ugh
Well, at least Deutsche Telekom is probably happy to finally get rid of their
stupid adventure in North America. They bought for 51 billion dollar eleven
years ago, they are selling now for 39 billion dollar — all things considered
probably not a bad deal.

~~~
jarek
Hm - Wikipedia tells me Deutsche Telekom bought what was to become T-Mobile
USA in 2001 for $24B. After inflation, that's around $30B in 2011. Where is
the $51B figure coming from?

~~~
ugh
German press: [http://www.sueddeutsche.de/wirtschaft/verkauf-von-t-
mobile-u...](http://www.sueddeutsche.de/wirtschaft/verkauf-von-t-mobile-usa-
an-att-telekom-raeumt-ron-sommers-milliarden-fiasko-auf-1.1074783)

Edit: So, I checked where that 51 billion is coming from. The German T-Mobile
International article quotes 39.4 billion Euro and references the 2001 annual
report, page 131. Here it is (2.4MB PDF monstrosity and German):
[http://www.download-
telekom.de/dt/StaticPage/47/29/gb_d_komp...](http://www.download-
telekom.de/dt/StaticPage/47/29/gb_d_komplett.pdf_47298.pdf)

The relevant passage (German): „Am 31. Mai 2001 erwarb die Deutsche Telekom je
100 % an der VoiceStream Wireless Corporation, Bellevue, und der Powertel
Inc., Bellevue, zu einem Gesamtkaufpreis von 39,4 Mrd. € inklusive einer Cash-
Komponente von 4,9 Mrd. € und einer von der Deutschen Telekom bereits im
September 2000 getätigten Investition in Vorzugsaktien von VoiceStream in Höhe
von 5,6 Mrd. €.“

That passage basically says that they bought 100 percent of VoiceStream and
Powertel for together 39.4 billion Euro.

Well, we are still no closer to finding out what caused the discrepancy —
maybe the Wikipedia article is simply wrong?

~~~
jarek
Intriguing - googling around I also saw the $51B number mentioned in
[http://www.networkworld.com/news/2011/032011-att-tmobile-
acq...](http://www.networkworld.com/news/2011/032011-att-tmobile-acquisition-
pundits.html), and in contemporary articles
<http://www.photonics.com/Article.aspx?AID=6715> and
<http://www.economist.com/node/449273> \- but interestingly both appear to be
written before the deal closed. On the other hand Wikipedia offers no
citations for the $24B number.

This is a massive discrepancy - wonder where it's coming from...

edit: the $24B figure was introduced into Wikipedia in July 2007:
[http://en.wikipedia.org/w/index.php?title=T-Mobile_USA&d...](http://en.wikipedia.org/w/index.php?title=T-Mobile_USA&diff=next&oldid=16343073)
and not challenged since. On the other hand the main T-Mobile article gives a
$50.7B figure with a citation. I [citation needed]-ed the $24B claim, let's
see where it goes.

------
apress
Very interesting piece though weirdly doesn't mention Apple (at least as of
right now, maybe he'll update?). Plus for Apple is access to more customers
for iPhone though right now T-Mobile 3G network is incompatible with GSM/3G
version of iPhone. Downside is greater bargaining power of AT&T and Verizon as
carrier space consolidates.

But with regards to Google, it seems kind of silly to suggest tiny, market-
share losing T-Mobile was all that stood between the carriers hijacking
Android and nirvana. Google's biggest bargaining chip with carriers is the
inclusion of very popular Google Android services like mapping, voice to text
etc. And Verizon and AT&T seem pretty high on Android to prevent Apple from
gaining too much sway.

Lots more to come on this one...

~~~
alecperkins
Hmmm it is funny that Apple isn't mentioned, given its influence in the
hardware side.

A general suspicion has been that Apple will open up the iPhone to other
carriers with the next rev. I wonder if this will impact that plan at all (if
it exists).

Now, they don't need to expand the carrier offering to increase the customer
base. But, it's a greater customer base entirely within AT&T. But, AT&T will
now — presumably — have better coverage. But, AT&T is already strongly
disliked as a brand, and this doesn't change that. And so on…

I would think that Apple is at best wary of the merger, since, like the rest
of the hardware providers, the increased bargaining power of the carriers is a
problem.

~~~
kelnos
Long-term ATT'll have better coverage, but for now, not so much. Basically
they (that is, existing ATT customers) get T-Mo's 2G/EDGE network, but that's
about it. 3G is still on two different channels, so ATT/T-Mo customers are
still split there. ATT's 4G network is nonexistent, while T-Mo's is brand-new
and tiny. Moving forward, as they build out 4G, this is a net win, but the
merger doesn't help anyone's 3G coverage.

Ugh... I hate this. I really don't want to be an ATT customer.

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skbohra123
I always thought that these problems exists only in the developing nations,
but alas.

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kenthorvath
Does this mean I will now have an additional array of cell towers to boost my
otherwise crappy reception? Will this result in load balancing for AT&T's
overwhelmed 3G network?

~~~
gamble
T-Mobile's phones operate on a different frequency than AT&T. I don't see them
merging the two networks. Chances are that T-Mobile's network will be put in
maintenance mode, with any new customers receiving phones on AT&T's
frequencies, until the LTE transition is complete and AT&T can shut down the
T-Mobile network. It may be a boon for existing T-Mobile customers, who will
presumably be able to use multi-band GSM phones on AT&T without roaming fees.

~~~
jarek
Putting AT&T-frequency radios on previously-T-Mobile towers is a relatively
low-cost possibility that would help with AT&T reception/bandwidth, although
that will probably have to wait at least a year or so until the back-end
routing systems are merged.

~~~
gamble
That's true. I imagine the regulatory hurdles to add radios to existing towers
is orders of magnitude lower than building new towers. Might be a win for AT&T
in cities where T-Mobile has good coverage.

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bkaid
Apple and iOS developers will probably win with this.

~~~
chrisbolt
Why? T-Mobile isn't getting the iPhone, so they aren't getting access to any
new subscribers.

