If they don’t, Sprint tanks, and we still have three main market leaders, however two will remain significantly ahead of the third. Keeping in mind that the two that are ahead are now playing the monopoly game and buying into other industries (see AT&T and Time Warner or AT&T and DirecTV or Verizon and Yahoo, etc)
Approve or not approve, regulators are sometimes forced into a position of "picking winners" :-(
Another thing that needs thinking through is what happens to Sprint's spectrum if the company goes under. What kind of rules will be placed on that auction? Would ATT and Verizon be likely winners of such an auction?
Your statement sounds correct but I don’t exactly like the reality.
Running a nationwide cellular network is expensive and complicated AF. You have to provide a level playing field if you want to enable competition without needing hundreds of millions of dollars to start up.
before this, wireless tech/infrastructure just wasn't good enough, and needed continuing investment to improve. now that we're over the hump, a GSE can begin buying up the 4G infrastructure and leaving operations/service to the carriers.
since there are 4 national and some regional carriers, you could even divvy the duplicative infrastructure up between state and federal GSEs, much like state and federal highways. then you'd have some semblance of competition that would keep the infrastructure from just crumbling away from political/bureaucratic neglect.
I guess you could enforce roaming agreements like they do in the EU(?) but then you still would have carriers having to negotiate with each other when one carrier has more external roaming traffic with the other - like Internet peering arrangements.
I don’t have a strong emotional opinion either way. Just trying to come up with pros and cons.
Edit: found a spectrum map reportedly from the acquisition
“The cellular company with the worse customer service has combined with the cable company you hate....”
More importantly do we really want a media company owning a cellular company? Shouldn’t we be trying to get away from media companies merging with communication providers. Comcast owns NBC/Universal.
Also, T-mobile was hurting because it was the last major carrier that didn’t have the iPhone.
T-Mobile's turnaround had a bunch of facets.
1) Increased spectrum. In 2011, T-Mobile didn't have the spectrum to launch a competitive LTE network. AT&T had to divest spectrum to T-Mobile as part of the breakup and they gained spectrum through their merger with MetroPCS giving them 20MHz of new spectrum. 20MHz of new spectrum is an LTE network right there. In some ways, AT&T's decision to offer spectrum as part of the breakup fee might have pushed the FCC to deny the merger. "T-Mobile can't compete due to its spectrum position...which would improve if you denied this merger and might put them in a position to compete."
2) Increased customers. MetroPCS added 28% more customers, 26% more revenue, and 29% more EBITDA (earnings before interest, taxes, depreciation, and amortization). In an industry that relies a lot on scale, that's pretty important. It moved T-Mobile from a very distant 4th place where Sprint was 61% larger to a much closer 4th where Sprint was only 21% larger.
3) Finances. T-Mobile's finances were a lot better than Sprint's and Deutsche Telekom reduced T-Mobile USA's debt as part of the MetroPCS merger by $3.8B. That meant that the new T-Mobile had a solid footing to go forth.
Sprint, on the other hand, is getting crushed by debt. T-Mobile's net debt in 2013 (when they started making their comeback) was $15.3B over 44M customers or about $348 per customer. Sprint's debt is $32.9B over 54.5M customers or about $604 per customer. A lot of that debt is coming due over the next couple years. If Sprint is paying that debt and doesn't have the money to invest in 5G, it's hard to make a turnaround.
Sprint has $27.6B in debt maturing from 2019 through 2023 (5 years). That's going to make it hard for Sprint to invest in its network during critical years for 5G deployment. They'll be competing against a T-Mobile that can get loans at better rates and has about half the debt Sprint has on a per-customer basis. T-Mobile is profitable and has revenues about 32% higher than Sprint.
4) Timing. T-Mobile launched the Un-carrier while customers were still making up their minds about LTE and hit the ground running fast. They announced targets for LTE coverage and blew past them inspiring consumer confidence. They broke new ground on pricing and features offering a more consumer-friendly approach to wireless - no contracts, trading in phones for upgrades, free international roaming, paying off ETFs to get switchers, music streaming that didn't use data, video that didn't use data, and finally unlimited. Likewise, T-Mobile was going up against an AT&T and Verizon that were only two companies and had become very anti-consumer and very unfriendly.
Today, the timing isn't there for Sprint to do the same. AT&T and Verizon were broken by T-Mobile. They now offer unlimited and while they might not be the best deal, they make sure to remain competitive.
Likewise, Sprint would have to compete against three strong companies instead of just two. That's a much harder proposition. These are three companies with way more customers. T-Mobile is now 50% larger than Sprint. These are three companies with more revenue and profits to invest in their networks. These are three companies with more low-band spectrum to provide broad coverage. These are three companies that aren't under crushing debt.
5) Spectrum Mix. Ultimately, Sprint's assets are different from the other three companies. Low-band spectrum covers a larger area and provides broad, reliable coverage. The other three carriers have 3-5x more than Sprint. Mid-band spectrum was used to supplement that for greater capacity and the other carriers have about double what Sprint has. Then Sprint has a lot of high-band 2.5GHz spectrum that doesn't cover as much area. Clearwire and Sprint have been trying to use that spectrum for over a decade and it's not fruitless or anything, but it's unclear whether that spectrum will provide compelling mobile service that will truly compete.
Now, that spectrum could be quite useful for 5G. However, Sprint doesn't have the finances to go on a huge spending spree to add more cell sites (and they have far fewer than the other three) and mobile use still might need more low and mid-band spectrum than Sprint has to create a robust network that doesn't feel patchy.
I think it's easy to say that Sprint could do what T-Mobile did. However, I think there are key differences. T-Mobile changed its possible future by adding 20MHz of new spectrum (increasing its total spectrum by 38%). The addition of MetroPCS customers meant that Sprint was only 21% larger while T-Mobile stands at 50% larger than Sprint today (and that gap is growing as T-Mobile adds millions of customers each year). T-Mobile's finances were simply so much better. They were barely profitable, but profitable with so much less debt. The timing was right to disrupt the market as AT&T and Verizon kept making increasingly consumer-hostile moves and jacked up prices a lot, but that isn't the market Sprint faces today. Finally, it might just be that Sprint's spectrum mix makes it hard to create a network that customers love.
It's certainly possible that Sprint could turn itself around, but T-Mobile was in a very different situation when it launched its comeback.
This will probably help net neutrality slightly since T-Mobile and Sprint gotta duke it out offering more network throughout to customers while AT&T and VZW compete over speed... the four sort of forcing each other to sort of almost make something which appears neutral (it’s not).
Unless there are no gigantic telecoms or there’s way more government intervention in these markets (common carrier status anyone?) there will be no point in things like this against the bottom tier national providers.
No Amount of mergers between giant monopolies is gong to fix structural problems.
On a cynical level, it maybe that "China" is used as an excuse to push through a merger for profits, but lets assume some innocence.
The execs. realize how costly 5G is going to be, and the only way they know to borrow that amount of money is increasing their underlying capital assets.
The problem is that Huawei became successful in 5G through massive government investment, currency arbitrage ( supported by the US ), cheaper land, cheaper engineer, ...
Just a side note, have a look at how Huawei operates. They build a giant 60,000 engineer city for their employees !
Is the US ready to create a giant 60,000 engineer city to compete in 5g ? where engineers are paid a fat salary with low rent ? ( in PPP terms )
5G maybe the reason why the US has to finally confront the structural reasons why they have become so uncompetitive in electronic hardware in relation to East Asia.
Why would anybody need to build a city of 60,000 engineers to compete in 5G? Europe's leading 5G makers are not doing that so that they can compete with Huawei, because it's obviously entirely unnecessary.
The US doesn't need to change anything to compete with China. It has been successfully out-competing China in nearly every field for decades, save for low value manufacturing. China poses no greater competitive threat in the middle and upper tiers of economic competition than Western Europe does (presently far less in fact). The US also didn't need to entirely alter itself to compete with Western Europe.
> the US has to finally confront the structural reasons why they have become so uncompetitive in electronic hardware in relation to East Asia
No it doesn't need to do that at all. The US leads the world by a large margin when it comes to the semiconductor industry - the most important components of electronics today. Manufacturing electronic hardware is a low value economic segment, which is why it's outsourced. It can be pushed from China to a dozen other countries instead (see Foxconn's statement that they're prepared to move Apple's manufacturing out of China any time, that's how weak China's value proposition really is). Samsung - the world's leading phone maker - has already done that, moving a lot of their phone manufacturing to Vietnam.
Well this is quite the eye opener. Thanks for sharing. Can I ask what the original website is though? Why is it down?