AT&T would divest more T-Mobile assets to make merger work
1. christony1120 (Posts: 65; Member since: 07 Dec 2010)
you see ATT is just not capable in handling the merger nor T-mobile
23. networkdood (Posts: 4748; Member since: 31 Mar 2010)
Dumb statment, dude - AT&T has to make concessions to get approval from the gov't - it is not about how they are handling the merger , because this one has not taken place yet. Now, when it does take place, then we shall see how it goes.
2. LewsTherin006 (Posts: 140; Member since: 18 Nov 2011)
even if att gets rid of 40% of Tmobile, they still have to find people with enough money to buy it. Maybe US celluar or Metro PCS, but verizon doesnt look like they want it, and sprint just spent all their money on the iphone.
6. Droid_X_Doug (Posts: 4713; Member since: 22 Dec 2010)
"... they still have to find people with enough money to buy it. "
"...it is unlikely that the DoJ would allow the T-Mobile assets to be purchased by Verizon."
The problem for AT&T is that even at a 40% divestiture, there is still the problem of reduction in competition and loss of jobs. They just don't get it. This is not something that AT&T can spin their way out of. The old routine of lying at every opportunity just won't work. This might have worked back in 2007, but not now. To many jobs have been lost; more job losses can not be swept under the rug.
12. ardent1 (Posts: 1863; Member since: 16 Apr 2011)
Therefore, the alternative is ATT with a spectrum shortage and Tmobile unable to build out its spectrum and that makes perfect sense to the DOJ and FCC et al.
The consumers end up losing in the process.
15. Droid_X_Doug (Posts: 4713; Member since: 22 Dec 2010)
ardent - your assertion about spectrum was challenged in the earlier article. Perhaps you could do PA readers a favor and back up your assertions with some objective facts? Just making unsubstantiated claims isn't going to cut it.
37. ardent1 (Posts: 1863; Member since: 16 Apr 2011)
You are equally guilty of your own assertion -- you provided nothing but hot air.
I also challenged the claim that Sprint was able to acquire Tmobile as well, which was complete horses**t. Like Sprint can come to the Capital Markets and raise $39 billions in new debt when it haen't been profitable in about 4 years. How many PA readers can discern Sprint's debt rating and the associated probability of default, i.e. how quickly Sprint could file for bankruptcy?
Recall you stated ATT can engage in a hostile takeover of a private concern -- reinforcing the notion that civilians don't have the necessary accounting background or legal knowledge. remixfa, the RVI, goes around claiming RD expense belongs in the gross profit margin calculations.
39. remixfa (Posts: 13882; Member since: 19 Dec 2008)
I dont think sprint would be able to pull the capital out of their butts, but they could do a partnership with tmobile. However I dont think that would work well in either's favor since their technology is so different, unless they were purely partnering for a dual LTE roll out where they were able to roam off each other. If they could pull that off and switch everyone to LTE voice & data, then a merge might be feasible, but until then it would make no sense.
24. networkdood (Posts: 4748; Member since: 31 Mar 2010)
Funny, that you mentioned jobs - you can thank the government for the loss of 4 million jobs since NAFTA passed.
29. Droid_X_Doug (Posts: 4713; Member since: 22 Dec 2010)
How does NAFTA relate to AT&T-Mobile? (Confused)
41. corporateJP (Posts: 896; Member since: 28 Nov 2009)
Yep. I didn't think Bill Clinton was a bad president until his wife made him...I mean, he signed the treaty.
3. cncrim (Posts: 364; Member since: 15 Aug 2011)
Att just don't want pay for break up fee...... they keep fighting until last minutes.
4. roscuthiii (Posts: 1602; Member since: 18 Jul 2010)
AT&T must be the elliptical machine king... they're doing some serious back-pedaling.
They should just admit the merger was only a bid to remove competition. How imperative was the acquisition of T-Mobile when they're willing to divest nearly half of it? $39B could have upgraded a lot of their existing towers.
7. Droid_X_Doug (Posts: 4713; Member since: 22 Dec 2010)
"$39B could have upgraded a lot of their existing towers."
Interesting how they don't give a red rats ass about upgrading their network. It is all about taking out a competitor. F*ck the market.
Maybe not this time around.
13. ardent1 (Posts: 1863; Member since: 16 Apr 2011)
It's DT (Tmobile's parent) that is saying f**k the US customers because it doesn't want Tmobile to spend the billions to upgrade their network!!
25. networkdood (Posts: 4748; Member since: 31 Mar 2010)
Exactly, DT wants to sell - so, let it - SPRINT is incompentent at mergers as we have seen in the past....40% divesting of the sale onto smaller carriers would be a win for those carriers. But, jobs will be lost.
42. corporateJP (Posts: 896; Member since: 28 Nov 2009)
Sell it to Century Link...they want to get into the business.
It's not rocket science.
SOMEBODY will buy it eventually.
AT&T just sucks, I don't want them to get it.
14. ardent1 (Posts: 1863; Member since: 16 Apr 2011)
That is one the biggest problems on this site -- civilians that don't understand business speak. The $39 billion is the consideration for the entire Tmobile franchise and some of that value would be goodwill after accounting for the market value of the said assets per acquisition accounting under US Gaap.
16. Droid_X_Doug (Posts: 4713; Member since: 22 Dec 2010)
Ummm. And you are the expert in 'business speak'? $39 Billion is what DT wanted to approve the merger. Otherwise, it would have been a hostile takeover. Without DT's agreement, AT&T was going nowhere in it's attempt to acquire T-Mo.
36. ardent1 (Posts: 1863; Member since: 16 Apr 2011)
Not all the $39 billion is in cash.
Tmobile USA is a private concern, so kindly explain to people how ATT can do a hostile takeover of a private subsidiary.
38. ardent1 (Posts: 1863; Member since: 16 Apr 2011)
One more thing, when I corrected you about your claim of Verizon amortizing it's PPE, you just brush it off. It's clear you are clueless about the income statement and US Gaap.
Then there was the time I corrected you because you had no idea how companies calculate margins and you mistakenly claimed you knew Apple's margins.
DxD, it's clear you are business speak challenged. I can find more examples where you butcher common business terms. The good news is you are not alone as other PA equally butcher business terms on a regular basis. The RVI doesn't have a clue as to what is a market niche.
19. remixfa (Posts: 13882; Member since: 19 Dec 2008)
can you ever post without trying to throw a back handed insult at someone? for someone who claims to be "a professional", you sure lack the ability to act like one.
43. ardent1 (Posts: 1863; Member since: 16 Apr 2011)
There you go again -- making stuff up. I never claim to be a "professional." Instead, I claim to be knowledgeable -- a big difference amongst these two words.
So remixfa, how's your histronic personality disorder treatments working out. I see you still can't control your insults.
5. snowgator (Posts: 3015; Member since: 19 Jan 2011)
They really, really want the spectrum. Why not just make an offer on the spectrum that T-Mobile can't use?
17. remixfa (Posts: 13882; Member since: 19 Dec 2008)
if they did that, and T-Mobile turned the stalled carrier into a growing carrier, it would only hurt T-Mobile in the long run as they wouldnt have that extra spectrum to grow on.
21. vvelez5 (Posts: 623; Member since: 29 Jan 2011)
I can only think that the cost for the spectrum is close enough to the cost of purchasing TMO outright. DT is trying to sell and ATT gets some contracts while they're at it.
31. Droid_X_Doug (Posts: 4713; Member since: 22 Dec 2010)
I doubt the value of the spectrum is anywhere near $39 billion in an auction environment. VZW won\'t be able to bid, and Sprint is going to offer less than $39 B (they don\'t have access to anywhere near that kind of cash after selling their soul to Apple for the iPhone franchise). $39 B is what AT&T had to offer for a friendly merger.
30. Droid_X_Doug (Posts: 4713; Member since: 22 Dec 2010)
Or, why not do a partnership where AT&T invests in building out T-mo\'s network for them (T-Mo). In return, AT&T customers get access to T-Mo\'s network when they are in the area and AT&T has no coverage. Sprint and VZW had (maybe still have) a similar agreement for their 3G network. AT&T is really hurting their case by insisting that the only way a deal can be done is with an acquisition of T-Mo.
8. rfrapp (Posts: 73; Member since: 10 Jun 2010)
I don't understand why AT&T and T-Mobile need to pass through the FCC to make their merge. I don't by any means agree with the merger, but businesses should be able to do whatever they want. The government should have no say in what a business does. If this merger ends up screwing AT&T, then they'll lose business and be forced to do something about it. That's how it should work
18. remixfa (Posts: 13882; Member since: 19 Dec 2008)
its called anti-competitive practices. its also called a monopoly (or in this case a duopoly). These rules are in place to protect the consumer from unfair business practices that disrupt the free market.
22. vvelez5 (Posts: 623; Member since: 29 Jan 2011)
More of an ogilopoly than a duopoly though Verizon and AT&T will be the big two (or already are). Though I disagree with people calling it "anti-competitive" TMO was in competition with AT&T and the other carriers and with any competition you have your losers and TMO lost. DT has no interest in continuing with TMO so why can't they sell their property? Especially now with almost half of TMOs assets looking to be sold off why shouldn't this deal go through? DT is going to get rid of TMO one way or another we will be down to three big national carriers for the moment. Though I do not believe it would last for long there is always someone who wants to get their head in the game, such as MetroPCS, Leap or even Cspire.
32. remixfa (Posts: 13882; Member since: 19 Dec 2008)
them swallowing Tmo isnt the anti-competitive part.. its what happens afterwards when you have VZW and ATT with nearly 80% of all american customers. At that point they can dictate pricing and as long as they continue their practice of almost completely mirroring each other's prices and practices they create an anticompetitive climate. Sprint would be the ONLY national alternative to them. A climate like that makes it very difficult for a new company to grow or for a struggling company like sprint to catch up.
33. vvelez5 (Posts: 623; Member since: 29 Jan 2011)
As opposed to right now? It's difficult for any company to play catch up but if you provide quality service at competitive prices then you have a shot. The idea of the companies dictating price is the problem. That's like saying our cellphone bills will skyrocket as soon as AT&T acquires TMO even though that isn't the case. There is a price that every consumer will pay until they decide that it isn't worth it. That's when you see consumers leaving and heading to smaller carriers such as Sprint and regional carriers. These businesses are there to make money that is why it's a business. They can't run a business if they just raise prices and upset their consumers. People will just leave.
34. vvelez5 (Posts: 623; Member since: 29 Jan 2011)
And when I mean companies don't dictate price I mean price is set by a simple supply and demand curve and where equilibrium lies.
40. remixfa (Posts: 13882; Member since: 19 Dec 2008)
very much as opposed to right now.
Tmobile (and sprint) put downard pressure on the market to reduce prices. People come to tmobile because their pricing is nearly half of the big boys. $60 for unlimited everything on 4g thats faster than everyone except VZW. The only reason more people dont go to tmobile is that they arent as big as VZW or Sprint in coverage (though they are roughly the same size as ATT, like it or not). Even if they do have great coverage under Tmo, they are convinced by advertising and poor word of mouth that they cant.
If it werent for Tmo and Sprint driving down the costs of plans over the last few years, there would have been no reason for VZW/ATT to come out with unlimited plans, and then reduce the costs of those plans. When they first came out, it was unlimited voice only for 100 bux. UNL everything was still 150 per line.. and that was a deal. (i remember people on 3000 minute single line plans for 200 bux a line on VZW) Sprint has unl everything for $100 and Tmobile has it for $60. That created downward pressure on ATT/VZW to reduce their prices even further to today's pricing. It may still be high, but its not as high as it once was.
Trust me, I used to work at VZW,many of those people wont leave no matter what the price, as they are convinced that they couldnt possibly get great service elsewhere.
The funny part is, people are so used to ATT's crap service that they think its the same everywhere, so they continue to pay for it.. or for their precious iPhones. thats why I laugh at all these ATT customers that talk trash about Tmobile. You are just paying more and getting less. Same coverage, slower speeds, worse data plans.. twice the cost!! yaay ATT!
44. vvelez5 (Posts: 623; Member since: 29 Jan 2011)
Doesnt make sense that Tmobile drives price down when they are bleeding customers. I have AT&T service and in my area it\'s great I am pulling over 2Mbps on a low end smart phone. and at work the only carrier that gets coverage in our break room is Verizon and AT&T. Anyone who has Sprint or Tmobile has to leave the building. I\'ve had Tmobile as well and that was horrible service in my area. And of course all areas aren\'t created equal. Also I live and work in a fairly large metropolitan area of Central Florida. So you can claim they have great coverage but at least in my area they are horrible.
10. mctcm (Posts: 204; Member since: 19 Oct 2011)
I bet they'll add at least 40,000 jobs in the process of divesting 40% of T-Mobile
20. remixfa (Posts: 13882; Member since: 19 Dec 2008)
can you explain how? when companies merge, they shed overlapping positions thus losing jobs. explain how you came up with them adding 40k jobs from all this, please.
11. Carlitos (Posts: 211; Member since: 23 Oct 2011)
Give that 40% percent to the 5thwoods carrier (metropcs) once they have all that they will use that to build up there network, and catch into the left big three, booming competition, since metro will most likely want to to catch up with sprint, vzw, and sprint.
26. networkdood (Posts: 4748; Member since: 31 Mar 2010)
The government has allowed mergers before and is no longer interested in saving jobs or ensuring the marketplace competition is not harmed. This is just all a big show for all to see and read. When the dust settles it will happen. I am not saying it is good for everyone, but when you look back at the last 20 years of how our government deals with big businesses, it is pro big business.
27. LewsTherin006 (Posts: 140; Member since: 18 Nov 2011)
Ask canada how the 3 major wireless carriers is working for them. Anyone want to get a galaxy nexus on a 3 year contract for $150? they also pay way more than we do. Its in everyones best interest if tmobile stays open. Tmobile keeps everyone else's prices down. Its basic business. Plus the stock market will take a noise drive with the lose of jobs, which will scare investers away.
If Metro PCS got the 40% from ATT, ATT would make sure they never rise very high, and ATT would just buy them a few years later. Its amazing how people dont really care about something until it affects them directly.
35. vvelez5 (Posts: 623; Member since: 29 Jan 2011)
You have a difference of 25 million wireless subscribers compared to 300+ million wireless subscribers. The more subscribers the more competitive the pricing gets because the companies can spread the cost of running the business out more. Don't get me wrong the American wireless carriers make more money but thats because they have more subscribers resulting in more profits while the consumers have a lower cost.
28. MiltoChezChelio (Posts: 2; Member since: 27 Nov 2011)
this is insane, everyone can see the damage that AT&T wants to do, even if you say you dont... in the back of your mind you do. $39 B that could beused to upgrade your networks expand 3G to all of your footprint.... and yet here you are Mabell a year later with all this opposition trying to wipe out T-Mobile. All because you have the money.. pretty dam unfair. If DT wants out thats fine sell it to someone else that is not verizon or sprint.. its prob better in the long run.