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Prepare for the Sprint/T-Mobile Merger Lies

时间:2013-12-27 12:40来源:www.pttcn.net 作者:Admin 点击:
IfSprint aims to buy T-Mobile, prepare for the lies. Sprint and T-Mobile are pretty upstanding companies, right now. I know both of their PR teams well, and theyre good people. But when merger mania strikes a carrier, strange things start

If Sprint aims to buy T-Mobile, prepare for the lies.

Sprint and T-Mobile are pretty upstanding companies, right now. I know both of their PR teams well, and they're good people. But when merger mania strikes a carrier, strange things start happening. Typically, the companies hire an entire separate PR firm that specializes in mergers, so existing PR people won't be stuck spewing the "optimistic mis-statements" that almost always accompany these kinds of moves.

Benefits get over-promised, problems get minimized. According to the companies involved, mergers improve service, lower prices, increase profits, and maintain competition all the while.

To steel yourself, let's look back at the two biggest domestic merger transactions these two companies have been involved with: Sprint's purchase of Nextel in 2004, and T-Mobile's failed merger with AT&T in 2011. Sprint and T-Mobile are both run by different people than they were at that time, but the mendacious habits of large, merging wireless firms are eternal.

In some cases, the companies overestimated their future success; in some cases, they underestimated their abilities as independent firms. In any case, you just shouldn't believe what wireless companies say when they're touting the benefits of a merger.

Most of the companies' promises, of course, are untestable. How can you truly measure the value of lost competition, or predict whether a company would have gone out of business had it not merged? But there are some important predictions that were proved false - and they're big enough issues that they throw everything merging companies say about the future of their networks into question.

The Big Lie
Promise: The companies cannot survive on their own.
Reality: Nobody can predict the future, but Sprint and T-Mobile are very upbeat about their futures as independent wireless carriers right now. T-Mobile's "Uncarrier" policies have led to a major upswing in new customers. Sprint's CEO Dan Hesse says 2014 will be his carrier's comeback year, and that his Network Vision plan is inflicting short-term pain for long-term gain. With massive investment from Softbank, Sprint is posied to make great waves in 2014. If the two companies suddenly turn around and say they're going out of business, they'll have to square that stance with their current optimism and plans.

Sprint-Nextel
Promise: Nextel's push-to-talk system was what its customers loved. To make the most of the merger, Sprint needed to retire it. "Sprint Nextel will deploy the push to talk feature using the 1xEV-DO Rev A platform. … should be completed in 2007 or early 2008." (source:official FCC filing)
Reality: Sprint's introduction of QChat push-to-talk in June 2008 was a complete failure; the experiment was terminated at the end of 2009. Nextel's iDEN network remained aliveuntil this year, preventing Sprint from making use of its spectrum.

Promise: On the 2.5GHz band … "the applicants would provide service to a nearly nationwide footprint including many rural areas, and would offer high speed, low latency access to high quality multimedia content at reasonable prices through a nearly national, wide area radio network." (source: official FCC filing, same as above)
Reality: Sprint/Nextel didn't launch a single 2.5GHz market on its own. Instead, it entered a tortured joint venture with Clearwire in 2008. By 2011, the resulting WiMax network covered 42 percent of the U.S. population when it stopped being built out, far from a "nearly nationwide footprint."

Promise: "Sprint Nextel is expected to have the highest average revenue per user (ARPU) in the wireless industry and to be positioned to lead the industry in sustainable revenue growth." (source: Sprint press release)
Reality: The merger was a financial disaster. Sprint's revenue dropped every year from 2006 until 2009. Only by 2012 did it reach its 2005 revenue levels again.

AT&T/T-Mobile
Promise: AT&T would only build out about 80 percent of the country if it didn't merge with T-Mobile. (source: AT&T FCC filing).
Reality: After the merger failed, AT&T announced a plan to build out an LTE network covering 97 percent of the country.

Promise: "T-Mobile's parent company, Deutsche Telekom, has made it clear that it will not invest the billions needed to build next-generation high-speed networks in the U.S. That means no path to LTE 4G high speed wireless broadband for T-Mobile customers." (source: AT&T FCC filing and AT&T press release)
Reality: T-Mobile's new LTE network now covers more than 200 million people. T-Mobile launched faster 20+20 LTE before AT&T did.

Promise: The merger would create jobs by investing an additional $8 billion. (source: AT&T press release, above).
Reality: AT&T told investors that synergies would result in $10 billion less investment (source: DSLReports.com).

With any luck, this ill-fated merger will never be floated. But if it is, keep a sharp eye on gadflies like Public Knowledge, Free Press, Consumers Union and other non-profit organizations that genuinely work for consumers, not for investors who want to sell after the next stock bump. Karl Bode at DSLReports is also spectacular at sorting the truth from the lies, and I'll do my best as well.

For more, check out 6 Reasons Sprint Shouldn't Buy T-Mobile. Also watch PCMag Live in the video below, which discusses a possible Sprint/T-Mobile merger.


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