US government approves T-Mobile/Sprint merger

https://arstechnica.com/tech-policy/2019/07/its-official-us-government-approves-t-mobilesprint-merger/

by JaimeThompson • 7 years ago

109 52 7 years ago

arstechnica.com

howard9412• 7 years ago

Awful decision. It won't cut consumer costs. Not even Bork would approve.

Aloha6• 7 years ago

Considering I think the choice is Sprint going out of business, they are at risk of ceasing to be a 'going concern'.

howard9412• 7 years ago

What happened?? In 2018 they were near $2 EPS

vgoh1• 7 years ago

We are currently in "merger insanity". I'm wondering how many companies will be left before this ends?

kevinreedy• 7 years ago

The all new Verizon Chipotle Exxon: Proud to be one of America's 8 Companies

pkaye• 7 years ago

I don't know if Sprint would survive if not for the T-Mobile acquisition. They have a lot of debt. I think the most these states will get is some restrictions on T-Mobile.

dmitrygr• 7 years ago

"Welcome to AOL Time Warner Taco Bell U. S. Government long distance. Please state the name of the individual you'd like to call"

-Idiocracy (2006)

https://getyarn.io/yarn-clip/ad893407-a612-4158-96da-f75b143...

the_watcher• 7 years ago

This merger doesn't reduce total companies though, since Sprint was very clearly going out of business without it.

gonehome• 7 years ago

To me this makes a lot more sense than the T-Mobile At&t merger that failed to go through.

Sprint is a pretty dead brand and provider. They were actually giving away a year of free service without any obligation (you only had to pay $2 tax/fee) and people still would not switch to it.

T-Mobile has pushed the other carriers to bring back unlimited plans and they've separated the phone cost from the plan itself (allowing people to more easily switch carriers and bring their own phone).

Allowing T-Mobile to get more customers and a stronger position might be a good thing in order to compete with Verizon and At&t.

sjg0072• 7 years ago

I had the Sprint plan. I liked it. Hard for the average person to get on it though. You would have to pay full price for the phone and then activate it (while switching your old phone number over) and you couldn't do that in store. If you bought say a new Apple phone at full price and wanted to finance it through Apple/Citizen One, Apple would make you activate first which if you chose Sprint would invalidate your BYOD plan. That was a mess to resolve. And it was even more painful if you had multiple lines. So you had to be pretty savvy to get onto that $0 plan... which means those that did are also savvy enough to switch to something else if they are price sensitive.

That being said I expect with the merger that prices will go up. Maybe we could get some MVNO deregulation or something.

fitzroy• 7 years ago

I also had the Sprint BYOD promo for a year since I had an unlocked iPhone 6+ at the time. The network was only very slightly worse than Verizon (mostly in and around NYC). I switched to Tello (Sprint MVNO, $17/mo for 3GB) when the promotion ended and the network quality has been the same. I only chose Tello because I already had the SIM and my plan was going to renew within 48. It's been fine.

I probably would've bought a new phone sooner but the terms were ambiguous as to whether or not switching phones (even one purchased separately and fully paid) would negate the promo or not.

Aloha6• 7 years ago

Sprint has a pretty solid network in most markets, but they also have a metric crapton of debt.

What it comes down to, is there isnt enough spectrum to have three fully competitive carriers. The merger of T-Mo and Sprint will give them a huge leverage point on spectrum. T-Mo bring 600, AWS bands, as well as 1900 PCS blocks, Sprint brings 2.6, 900 and 1900 PCS blocks.

sdinsn• 7 years ago

Sprint does have a lot of debt ($33 billion), but AT&T does also: ~$180 billion.

compuguy• 7 years ago

I agree, but only in areas that Sprint has band 41 deployed. In areas that Sprint only has band 25 and band 26, its data speeds are at the bottom of the pack...

GeorgeTirebiter• 7 years ago

I did the cellphone module for the EO PDAs back when there was just the "A" and the "B" ('Bell') carriers. I recall reading academic papers at the time pointing out that, technically, it would be most efficient to have a single swath of bandwidth assigned to a single company; instead, half went to 'A' and half went to 'B' -- guaranteeing a suboptimal technical solution. It's interesting to me that, at the time, they were able to get away with only 2 carriers per region.

TomMckenny2• 7 years ago

To me this makes a lot more sense than the T-Mobile At&t merger that failed to go through.

I'm sure that's true. But public interest is not why the T-Mobile At&T merger was derailed.

jessaustin2• 7 years ago

Don't leave us hanging, man! With what nefarious interest did the public interest fortunately coincide?

Rafuino• 7 years ago

Key quote, showing that it's not official yet. "The DOJ's approval is not the last one T-Mobile and Sprint need, because 13 states and the District of Columbia sued the companies to block the merger."

reilly3000• 7 years ago

US Antitrust law is among its most archaic, even though they are relatively young. Even the term Trust speaks to an a term that is no longer in common parlance. As there is discussion about 'breaking up' Facebook and others, the murkiness of the law is painfully clear.

They should be referred to as competition laws, and they should be plainly understood and work at preventing and penalizing anti-competitive behavior. De facto digital monopolies have emerged as they have been freely allowed to act against their competition in ways that would have never been tolerated in meatspace.

mtgx• 7 years ago

And such a law and the agency enforcing it need to be a lot more pro-active. By the time governments decide they need to "break-up a company", the lion's share of the damage has long been done against both small players (or potential entrants that never stood a chance) as well as consumers.

This is why although I'm a bit supporter of GDPR and other such regulations, I think there is some truth in the idea that they also "lock-in" the larger players, because of 2 primary reasons:

1) the fine/punishment is never significant enough to the point that all of the ill-gained wealth is entirely wiped out. However, maybe it can't/shouldn't be fully wiped out anyway, because then we enter into the realm of applying laws retroactively a bit, and that brings all sorts of other dangers with it.

2) they block the newer entrants from using the same unethical tactics to effectively compete. However, I don't think this is a good excuse against not enabling such laws. Getting stuck with a couple of monopolies that can still be further regulated down the road isn't as bad as everyone stealing people's data and abusing it for personal gain, etc. Like we saw recently that US carriers have been selling people's location data to bounty hunters and all sorts of other shady groups -- all in the name of some extra profit. No, I definitely think a strong law against such abuses would be much better than it not existing.

But in an ideal world, the governments would've prevented the unethical behavior way before it starts giving companies billions of dollars in profit every single quarter. And then both the rampant abuses for a decade+ and the monopolies would be prevented from the start.

I've been kind of developing my own "rule of thumb" for noticing which company is a monopoly/makes too much money in some unethical way. When a company reaches this step you start seeing it "invest" into all sorts of crazy and unrelated ideas and markets that have nothing to do with its core business.

When a company has "too much money it doesn't know what to do with" and prefers spending it on completely unrelated markets instead of improving its core products/offering better value (huge red flag if it doesn't here), then you know that company is doing something that makes it way too easy for it to print money. Maybe it's lobbying Congress for locking out competitors, maybe it's it bribing government officials to gain contracts, maybe it's them coercing customers into exclusive deals, and so on. When it gets too easy to make a lot of money and the competition seems to have no way of catching up, it's not just because the product is that good.

neoburkian• 7 years ago

To quote the user wbl:

Aside from the transistor, negative feedback, Unix, troff, radio astronomy, the charge coupled device, cryptography, information theory, what did Bell Labs ever do for us? [1]

By the standard you set forward, we would have shut down Bell Labs BECAUSE it started to create these unquantifiably valuable inventions.

Google makes absurd amounts of money by search. Is it unethical to create an amazing search engine? Would it be better if Google said: "We aren't going to put money into moonshots, cancer research, laying fiber in Kansas, internet broadcasting balloons, AI research etc. We are going to take all of the money and pay it back to shareholders."?

I believe that your proposal, if put into practice, would amount to "we should destroy products that are successful". What am I missing?

[1]https://news.ycombinator.com/item?id=20512519

Consultant32452• 7 years ago

I think the laws are intentionally unclear for political purposes. They want a lot of subjectivity in enforcement. A lot of law is written this way.

rayiner• 7 years ago

Why do people think Sprint is so bad, and what does that say about our cellular market? It looks like I can get 5 lines for $150/month, with a 50GB soft-cap and 50GB of hotspot. That's less than half of what I pay for Verizon.

Such a lower-cost alternative should be able to attract customers in droves. Why can't Sprint?

sjg0072• 7 years ago

Coverage mostly and Verizon has better spectrum.

Aloha6• 7 years ago

T-Mo supposedly ended up with a pile of 600 MHz spectrum, and sprint has a big pile of 2.6 gig spectrum (nee clearwire).

misterprime• 7 years ago

The US is huge. It's hard to cover with mobile phone and data service.

People fear their phones not working on road trips, or when they go visit a different part of town. Verizon and AT&T built trust that they will be good enough, and better than the others. T-Mobile did some great marketing with their 4G launch and follow up campaigns that built a lot of trust. T-Mobile's customer service is also extremely good.

The perception of Sprint is that it just might not be good enough. In fact, it is good enough. A colleague of mine has been using it for the three years I've known him without real issue.

Sprint's recent $25/mo unlimited deal got me to switch from my $70/mo T-Mo deal. I've lost mobile hotspot, but the savings are worth it for now and there's no commitment. I'm only out the $38ish activation fee (both ways) if I want to switch away from them.

Aloha6• 7 years ago

Sprint has a really solid network in most metro areas. Both T-Mo and Sprint have huge issues with rural coverage, both have to leverage roaming partners to get real national coverages.

maxsilver• 7 years ago

Why do people think Sprint is so bad

Obviously every area is different, even on a block-to-block basis, but Sprint historically had the worst network density (lowest number of sites) in any area, while using the highest-band of spectrum (least propagation), while also having the least amount of backhaul (data speeds from the tower to the wider internet).

This generally resulted in them having the worst performing network in a majority of markets nationwide -- and worse by a wide margin. Think "I can't even get twitter.com to load" levels of bad performance. It was like that, in some places, for the better part of a decade straight. Sprint's cellular performance was so bad for so long, that sometimes callers couldn't even complete a single phone call. Sprint's service was so bad, it would regularly make the local evening news - https://www.youtube.com/watch?v=V_kvT5qsi9c

Add to that, that they were later than all of their competitors in deploying broadband (which they weren't able to do themselves, and had outsourced to Clearwire to redo, who also botched the work and Sprint later aquired them and had to re-redo their work), add in that they completely botched their Nextel acquisition (which ironically had a better network than Sprint in many places -- a network Sprint promptly discarded with zero effort to reuse or recycle), add in that their phones had to have dual or even triple redundant radios for a while to handle all of their incompatible network systems (for a while there, Sprint literally sold phones that had to have CDMA + WiMAX + LTE radios running simultaneously just to get usable coverage -- which murdered battery life), add in that they were tied to legacy CDMA technology which, unlike Verizon, Sprint dragged their feet on modernizing, and you get a recipe for disaster.

The word "Sprint" is basically synonymous with "shit service" in the mind of most semi-involved cellular customer, for many of the reasons above. Even when Sprint finally started to fix some of their problems (around in 2017-2018 or so), so much damage had been done so thoroughly for so long, that the brand was basically toxic, regardless of fixes.

xrd• 7 years ago

Matt Stoller has some harsh things to say about this, saying this is only happening because of Trump's friendship with Masayoshi Son: https://mattstoller.substack.com/p/trump-antitrust-going-aft...

jessaustin2• 7 years ago

The corruption angle is interesting, but it's got to be better supported than this. Just flatly stating "the goal of the merger is to raise prices" is not enough. Are there mergers not motivated by that, at least in part? If either ATT or VZN disappeared in the near future, then this merger could be part of the chain of events leading to raised prices. Back in the real world, prices might go up but not because of anything the merged company has done. It's still number three. This merger is good for consumers, on balance. Not just for Sprint customers but also for the customers of the hundreds of MVNOs dependent on Sprint's ongoing operation.

koolba• 7 years ago

Assuming T-Mobile continues their multi-year policy of never raising prices on existing customers I'm all for this. One stronger competitor to AT&T and Verizon is much better than one almost competitor and an almost-dead-but-still-owns-bandwidth one.

adventured2• 7 years ago

I agree with the spirit of what you said, however I would upgrade T-Mobile in that analysis. They're a beast of a competitor without Sprint, and they're slow-stomping both AT&T and Verizon. Grinding gains persistently year after year.

They're adding millions of customers per year in the US, nearly all of which are being stolen from the competition. AT&T and Verizon are sitting on stagnant wireless businesses, while T-Mobile keeps getting bigger.

Operating income hit $5.4 billion last year (up 100% in three years).

$72 billion market cap, up from persistently losing money and worth just $10 billion seven years ago.

Without Sprint they're on their way to a $120-$150 billion market cap and $10 billion in operating income in the next five years or so. And there's nothing AT&T & Verizon could do to stop it.

tipsysquid• 7 years ago

I used to think nearly the same way. But consider this systemic risk to wireless competition: If T-Mobile is not allowed to buyout/merge with Sprint, and Sprint continues the spiral that they are currently in, there is a possibility that AT&T and/or Verizon end up with more spectrum in the end. T-Mobile isn't nearly as capitalized to buy Sprint's premium spectrum on the open market like the other 2 competitors are.

teilo• 7 years ago

I'm already on T-Mobile. I'm for this mostly because the Sprint network plugs some significant holes for me in places I travel, like northwest Iowa. When they put their cross-roaming agreement into effect earlier this year, I suddenly had coverage all along that corridor. Otherwise, I'm stuck with the extremely small data roaming allowance they provide.

jandrese2• 7 years ago

How are the towers going to be handled post merger? T-Mobile's GSM based service vs. Sprint's CDMA service means someone is going to have to win if they're serious about consolidating spectrum and towers.

eeeeeeeeeeeee• 7 years ago

Maybe they won’t bother until a 5G deployment in the future? The merger will probably take at least a year, probably longer, to fully integrate anyway.

jandrese2• 7 years ago

Is 5G going to be fully converged? I thought the mmwave stuff was converged but the "4G with some touchups" part that most people will be using the majority of the time was going to keep the legacy GSM vs. CDMA nonsense?

mdasen• 7 years ago

Both GSM and CDMA are going away. T-Mobile is a mostly-LTE carrier already. Both Sprint and T-Mobile use LTE and most Sprint customers will already have compatible handsets. Others will be given upgrade offers.

T-Mobile’s network will form the core of the new network because it’s significantly better, most Sprint devices will support GSM and UMTS 2G/3G standards (while the opposite isn’t true), T-Mobile’s network supports voice over LTE, T-Mobile’s network has significantly more cell sites, etc. Some Sprint sites will be added to the network and Sprint’s spectrum will be as well. Other sites will be divested to Dish.

The CDMA vs GSM divide just isn’t that important today given that carriers should be mostly LTE already.

JustSomeNobody• 7 years ago

I hate mergers like this, but the option is Sprint goes out of business and either AT&T or Verizon feasts on their carcass and we still only have three providers.

Paul-ish• 7 years ago

Does anything stop Dish from selling that spectrum back to the new company?

sys_64738• 7 years ago

Consolidation is bad as it causes prices to rise.

icebraining• 7 years ago

Unless a consolidation of smaller companies helps them to compete against one or two giant ones, who would otherwise dominate the market.

burfog• 7 years ago

I'm not loving this, but there are far bigger problems. Unless we're preparing to undo the mergers that made Verizon and AT&T huge, it wouldn't be fair to stop a couple piddly little companies from merging. Maybe they need to merge for survival.

jpindar• 7 years ago

Meanwhile, tmobile.com has been down (at least intermittently) for more than a week. Purely coincidence I'm sure.

US government approves T-Mobile/Sprint merger

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