AT&T and T-Mobile Merger: A Thanksgiving Treat!

The race for market share in the 4G wireless world is full tilt boogie, and it’s tough to make a call on how things will go and what the outcome will mean to folks who actually run a business.  Way back in April of this year, the FCC announced that it opened a review of the previous month’s $39 billion AT&T bid for T-Mobile.  The AT&T merger with T-Mobile has been on the burners for a while now so it’s a good time to gather round and see what is happening and ask what we feel its effects have been and will be.


Looking Out For Business

The latest news on the new AT&T network promises download speeds of 5 megabits to 12 megabits per second. That’s enough to download a DVD-quality two-hour movie in 15 minutes and in line with the speeds on Verizon’s LTE network, which launched late last year with separate data plans. AT&T’s older “4G” network provides top download speeds around 6 megabits per second.  AT&T’s LTE plans have figured in the company’s bid to buy T-Mobile USA for $39 billion. AT&T says it, “originally planned to build out LTE to cover 80 percent of the U.S. population, but if regulators let it buy T-Mobile, it will upgrade cell sites in rural areas as well, to cover 97 percent of the population.”  The initial five LTE cities are all areas in which AT&T is the landline phone company.  It may be that we return to

Mighty impressive talk for an old-time, all-time, under-achiever like AT&T.  The fact they are still playing catch-up is a worry to those of us whose business depends on their credibility.  I’ve heard about their futures for decades now, but fail to see any climax to their story.  They will cut jobs and reduce R & D and that is the pattern no one seems to care to address.  End result is, YOUR business is at a disadvantage in the markets.  My bandwidth doesn’t match developing countries and the cost is triple many of them.  This little plan works like regional tariffs.

TOO BIG TO BAIL

On the subject of “too big to fail” with banks, it’s a pity that so many failed to follow the dots to reason that utilities and favored “telecom” industries were also culpable, and vulnerable, all under the same umbrella.  It’s not like it was a secret.


Integrate Mobile with Your Business Phone System the Right Way

After all, no one has owned a license to print money longer than Good Ol’ Ma Belle, AT&T, along with most of their cohort.  They own a bulk of the vigorish from landlines and networks and they are now planning this arbitrage to take over wireless futures.  The deal has been blessed, btw, by T-Mobile owner Deutsche Telekom

AT&T ended the second quarter of 2011 with over 98.6 million subscribers, while T-Mobile had about 33.6 million customers. With more than 130 million subscribers being served by a single provider, the industry would quickly become a two-player game. Verizon at the end of the second quarter had 106.3 million subscribers, Sprint had only 51.8 million. None of the other smaller carriers had 10 million subscribers by the end of the period.

New York Attorney General Eric Schneiderman, joined by the attorneys general of six other states in support of the Department of Justice suit want to halt the pending AT&T/T-Mobile merger, “This proposed merger would stifle competition in markets that are crucial to New York’s consumers and businesses, while reducing access to low-cost options and the newest broadband-based technologies.”

Well yeah, for starters.  But what about special interests here?  Who are the folks who think this is a good idea, and do they agree with their constituents?  There is clearly a red state blue state conflict, as we see below in the chart, but there are many exceptions, and the reasons aren’t clear to us what the is the value proposition that this merger provides for the user?

States favoring suit States opposed to lawsuit Recipients of AT&T $490k campaign gifts Dems opposed to suit, who received no gifts Dems opposed to suit, and led the $pack
New York

California

Illinois

Massachusetts

Ohio

Pennsylvania

Washington

Alabama

Arkansas

Georgia

Kentucky

Michigan

Mississippi

North Dakota

South Dakota

Utah

West Virginia

Wyoming

Heath Shuler

John Barrow

Mike Ross

Dan Boren

Dennis Cardoza

Joe Baca

Leonard Boswell

Ben Chandler

Jim Costa

Henry Cuellar

Mike McIntyre

Mike Michaud

Collin Peterson

Loretta Sanchez

David Scott

1. Mike Ross (Arkansas self- identified “Blue-dog”)

2. Henry Cuellar (South Texan)

3. Mike Michaud (a sort of European Blue web site, who claims, “He hopes to craft legislation that will help the companies who have already chosen to “Make It In Maine” incentivize more to do the same.”

How does the merger affect that legislation?

4. Collin Peterson

1. Heath Schuler >$40k last 3 yrs.

2. John Barrow >$20k last 4 yrs.

3. Joe Baca >$38k last 4 yrs.

So far we’ve contacted a couple of the Democrats on the list to see why they felt the merger was a good idea and opposed the FCC’s review of the proposition.  We’d like to know what their algorithm was for favoring or dis-favoring the challenge.  And most of all, we’re curious about how this money thing works, and how folks explain the often heard ‘conflict-of-interest’ problems.

We’ll post their responses as we get them and let us know if you want us to get any other answers, or if you want to share your experiences in this particular area.

Tek-Tips
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