States are looking to jam T-Mobile and Sprint’s proposed $26.5B merger

https://techcrunch.com/2019/06/11/states-are-looking-to-jam-t-mobile-and-sprints-proposed-26-5-billion-merger/

by srnvs • 7 years ago

53 61 7 years ago

techcrunch.com

em3rgent0rdr• 7 years ago

"The lawsuitm" typo

wrong_variable• 7 years ago

The problems facing the US in competing with China are structural.

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.

soup102• 7 years ago

Let's not forget that our government is mostly run by people with law degrees while china has a large amount of technocrats. Making it much harder to get state-scale large engineering and software projects going in the U.S..

dnautics• 7 years ago

There was a time when the us was led by a technocrat. His name was Herbert Hoover.

skinnymuch• 7 years ago

We have had a leader being a technocrat/rich businessman only once before in US history. That was Herbert Hoover. Now Trump. Neither have done anything amazing for business and/or innovation.

mehrdadn2• 7 years ago

A little confused how China has "succeeded" in 5G to begin with. Has 5G already been deployed in China? Are 5G phones out over there? Is it actually what it was claimed to be in the past few years? In what way has it been already successful?

panny• 7 years ago

http://archive.is/pVwbM

adventured• 7 years ago

I'm not sure what you're talking about.

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.

michaelvoz• 7 years ago

Agreed. There’s a reason the most educated and capable Chinese move the the US and become Americans. America’s cultural and technological dominance comes from its flexibility borne from a willingness to take in hard working immigrants from anywhere. America is exceptional in that it is a country of immigrants.

rashkov• 7 years ago

Wait, why are we in a race to get to 5G? Why are we in a competition with China over 5G? This is nothing but spin, and this kind of talk was probably originated by the telcos themselves, who benefit from this sort of high pressure tactic to cut regulation and receive major subsidies. Not my original idea, but it has been a great question to ask.

https://www.theverge.com/platform/amp/2019/5/23/18637213/5g-...

CriticalCathed• 7 years ago

I left Sprint because I hated their guts. I went to T-Mobile.

randyrand• 7 years ago

ATT & Verizon have impressive lobbies.

pcurve• 7 years ago

My hunch is they would welcome the merger

scarface745• 7 years ago

This makes no sense to me. There is no reasonable reality where Sprint becomes a healthy competitive force in the US as a standalone business.

colinbartlett• 7 years ago

Instead of approving this merger, is there another way the government could encourage competition? Perhaps break up the larger carriers or some how promote new upstart competition?

Your statement sounds correct but I don’t exactly like the reality.

toomuchtodo• 7 years ago

Manage the cell tower infrastructure and spectrum themselves through a non profit GSE (government sponsored entity) (think ISO grid operators for electric grids) and make every commercial provider an MVNO stakeholder. Similar to a municipality owning the last mile fiber to the house, and any provider can provide you service with a quick patch cable or VLAN change at the central office/colo facility.

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.

theturtletalks2• 7 years ago

I don’t see how. Most of the small carriers piggyback off the big 4 networks anyways.

scarface745• 7 years ago

Breaking up the carriers would be worse for consumers. Every carrier now has some semblance of “nationwide” coverage.

baroffoos2• 7 years ago

Government owned infrastructure that anyone can rent space on. That way there is minimal startup costs.

kurczynski• 7 years ago

That's what people said when AT&T tried to buy T-Mobile.

kevin_thibedeau• 7 years ago

Cingular buying ATT Wireless? Sure no problem.

scarface745• 7 years ago

And AT&T paid T-mobile $6 billion in cash and spectrum afterwards because of the failed merger.

megablast• 7 years ago

T-Mobile was going to crap before its failed merger to ATT. It would be stupid to think Sprint can't turn itself around either.

scarface745• 7 years ago

T-mobile “turned itself around” partially because of the $6 billion that AT&T had to pay

https://dealbook.nytimes.com/2011/12/20/att-and-t-mobile-wha...

Also, T-mobile was hurting because it was the last major carrier that didn’t have the iPhone.

Despegar• 7 years ago

It makes plenty of sense. The goal is to not let the number of wireless carriers go from 4 to 3. If Sprint is not viable then they'll file for bankruptcy and then Charter or Comcast (or both of them together in a JV) will probably pick up the assets.

hn_throwaway_99• 7 years ago

While I'm usually wary of giant corporate mergers like this, the fact that they are 3rd and 4th leads me to believe it would actually position them to better compete against Verizon and AT&T in a way that would be good for consumers.

shmerl2• 7 years ago

Let them invest to compete, instead of merging. Merging will only make things worse.

Dwolb• 7 years ago

Compete how? Competition with the market leader will improve if this merger results in a more formidable opponent.

cududa• 7 years ago

How are they going to invest? They make barely any money and are saddled with massive amounts of debt and no way to raise

ViViDboarder2• 7 years ago

How do you figure? If they merge, we get three main market leaders all competing head to head.

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)

NotSammyHagar• 7 years ago

I strongly disagree. These are the lower priced, more scrappy competitors. I think they'll reduce competition, especially toward lower priced customers.

ars• 7 years ago

No, they'll just have poor service from not enough towers and spectrum.

fyoving• 7 years ago

What's the thinking here? Stopping the merger of the two insignificant players would only shield the major players from real competition.

fitzroy• 7 years ago

At this point I'm just rooting for them to get together. They're like star-crossed lovers: Romeo Corp and Juliet Inc.

rubyn00bie• 7 years ago

The real answer to this is to break up AT&T, Verizon, and Comcast while blocking the T-Mobile/Sprint merger.

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.

States are looking to jam T-Mobile and Sprint’s proposed $26.5B merger

Related Stories