The proposition of this merger is one of the most blatantly negative outcomes for the public I've heard in some time. Anyone with even an inkling of sense regarding this industry understands that it would be very dangerous and troublesome for consumers if T-Mo were absorbed into AT&T -- not only would it pare down the oligopoly that is mobile telco and allow further price gouging (which is already quite excessive; cf. 20¢/text), but AT&T would have acquired the entire GSM market in the US, leaving current T-Mo customers with no choice but to use AT&T or get a new phone and foreign visitors with no choice but to roam on AT&T.
> (somewhere there's a paralegal looking for work today)
I like to think that somewhere there's a paralegal holding his head high for the "accidental" damage he inflicted to this potential merger. Good for you, man.
I think that is overstating the negative. You basically are going to get significant coverage improvements for TMO and ATT customers, and the cost will be potential price increases due to decreased competition. As an ATT customer, I really want the Tmo bandwidth. I'll take the risk.
I think you missed the point of the leaked letter. It claims that AT&T could have gotten the relevant coverage improvements for roughly 1/10 the price of the merger ($3.8 billion vs $38 billion). Why is AT&T willing to pay the extra $34+ billion? Taking out a key competitor seems like the obvious motive.
I wonder why they haven't gone ahead and made coverage improvements, then. Perhaps they've calculated that increased user satisfaction won't net them $3.8 billion more in profit.
That's in the letter too. ATT stopped considering building out their own network for $3.8B back in Jan, right around the time they started considering acquiring T-Mobile for $38B.
They decided to spend 10 times more on a process of regulatory approval and service integration that would likely take about as long as it would to simply build out their own network.
The implication being that ATT isn't doing this for T-Mo's network, but anti-competitively to crush Sprint by preventing them from getting T-Mobile's network and customers.
The coverage improvements would take years to build out their existing infrastructure with new base stations (erect new towers or lease space on existing towers, purchase and install equipment). By buying TMO, they would get an instantaneous coverage increase and instantaneous capability increase.
There has to be a substantial cost of opportunity if it takes them (e.g.) 5 years to build the infrastructure themselves. There also is the risk that ATT could not achieve the full coverage because it has gotten increasingly difficult to get zoning permissions to build unsightly cell towers.
> By buying TMO, they would get an instantaneous
> coverage increase and instantaneous capability
> increase.
Not really. Most of the coverage AT&T is lacking and proposed to build out to expand from 8x% to 9x% coverage is in rural areas where T-Mobile's network is even weaker than AT&T's. In other words, there are very few places where T-Mobile has coverage and AT&T doesn't already; most of the new coverage they'd get in this deal is redundant.
Beyond that, we're primarily talking about LTE coverage. That would require significant additional investment even if you added T-Mobile's (GSM/UMTS/HSPA+) infrastructure to the mix.
I knew I'd get down voted because this is an emotional issue for some. I didn't miss the point of the letter. It said the cost woud be to 3.8 billion to move LTE coverage from 80% to 97%. It didn't say the cost of matching the entire Tmo footprint in the US would be 3.8 billion. There would be massive coverage infill improvements for ATT by taking on the Tmo towers in addition to the LTE improvement. This would be a massive win for ATT customers in quality of service. It may bite them in price down the road, but definite good in the short term.
> (somewhere there's a paralegal looking for work today)
I like to think that somewhere there's a paralegal holding his head high for the "accidental" damage he inflicted to this potential merger. Good for you, man.