FCC website accidentally leaks letter from AT&T's lawyers to the agency about the T-Mobile deal
According to the letter, AT&T decided not to spend that $3.8 billion, deciding instead to spend $39 billion to acquire T-Mobile to end up with the same amount of the country blanketed by its LTE signal. While that sounds like a waste of money, there are some reasons why AT&T might have decided to spend about $35 billion more than it might have needed to. One reason is the rule of diminishing returns. With each additional tower covering fewer and fewer rural customers, AT&T would be getting back less in benefits from each buck it spends. In other words, the law of diminishing returns means that AT&T would be spending more money to capture each additional dollar of profits by adding the towers in rural locations, covering an additional 55 million Americans.
The other reason is simpler. By spending $39 billion to buy T-Mobile, AT&T kept the nation's fourth largest carrier out of the hands of Sprint. Rumors of a Sprint/T-Mobile combination had been bandied about in the days just preceding the announcement of an AT&T/T-Mobile deal. And while in both cases AT&T had to spend a lot more money than it might have had to to cover all but 3% of the country with LTE, the carrier had solid economic reasons to do so.
By the way, if you are looking for the leaked story on the FCC site, it has since been removed.
source: WirelessWeek via TechCrunch
1. remixfa (Posts: 13901; Member since: 19 Dec 2008)
in other words
"we spend 39 billion now, and get stronger towers already in place and customers locked in for a year or 2.... or we spend 50 billion upgrading our crappy network and advertising like crazy to get customers from the eventual sprint-Tmo merge that creates 3rd telecom company nearly as large as us with cheaper pricing... which means we would have to drop our prices to stay competitive and lose money"
2. luis_lopez_351 (Posts: 951; Member since: 18 Nov 2010)
WOW!!! At&t is a b*tch!!! Sprint should slap the Fudge out of them. I hear lawsuit coming on.
3. Droid_X_Doug (Posts: 5152; Member since: 22 Dec 2010)
Nothing like cutting competition out of the market. On that basis alone, the deal should be denied.
4. remixfa (Posts: 13901; Member since: 19 Dec 2008)
lol, thats all this deal was ever about. It instantly marginalizes sprint into a distant 3rd place. If sprint and tmo merged, all 3 carriers would be close to each other in subscribers and the resulting Tmo-Sprint merger would have created a bigger network than ATT in coverage by far (sprint is bigger anyways) and gave sprint enough operating cash from the new subscribers to throw LTE up much quicker.
11. Geeksarebest (Posts: 34; Member since: 28 Jun 2011)
But Sprint would be working with CDMA, GSM and iDen or whatever it is that Nextel uses. They haven't even figured out a way to integrate the nextel merger much less another network to maintain.
26. yeahthatscool (unregistered)
Is iDen apple??
21. Attsukballz (unregistered)
That's still kinda keeps technically 2 major GSM carriers as opposed to AT&T being the sole national GSM provider
23. remixfa (Posts: 13901; Member since: 19 Dec 2008)
True, the sprint-tmo merger would have been much more involved and would have probably stayed operating as sperate companies at least on the short term. Between them you would have GSM,gprs, hspa+,cdma,iden,wimax,1xrtt, and the whole rainbow of technologies.
Honestly if that happened, i really wanted sprint to convert its CDMA to GSM/HSPA+ (which would have made it a larger and more dense network than ATT instantly), dump everything else by giving everyone on any other signal a free upgrade to a GSM phone and shutting down those towers, and then concentrate on LTE. That way they would have had a 42mb/s HSPA+, a 7.2mb/s HSDPA(3g), and a 100mb/s LTE signal. That would have been one large and fast carrier that was better than ATT or VZW. That would have really heated up the market place.
The tmo-att deal is going to have the opposite effect. kill competition and squash future innovation.
16. cnwwyo (Posts: 123; Member since: 26 May 2011)
who is "making" tmobile sell? if they were doing so good they wouldnt need to worry about selling.
5. Geeksarebest (Posts: 34; Member since: 28 Jun 2011)
That's so weird...I didn't see anything about cutting Sprint out of the equation in the original article. Or the original FCC document.
Learn to seperate conjecture from fact in articles and it would have been worth the read.
6. E (unregistered)
Shut up hater, you would probably be one of the 1st to line up to have a barcode scanned on you so we know where you stand on things Mr Sheepel. Keep watching your MSM.
10. Geeksarebest (Posts: 34; Member since: 28 Jun 2011)
Hater? I did no such thing. I just think that there's a line between an actual fact and conjecture and there's room to differentiate between the two in an article.
The way it was worded was as if it was something that was presented in the article that leaked and it wasn't.
14. dashak (unregistered)
It's safe to infer that AT&T moved out the big bucks to block Sprint from merging with T-Mo, if right around the time AT&T started this whole hub-ub the Sprint CEO was talking about how a Sprint-TMo merger would be a great move and beneficial for both carriers.
If you only take the "facts" (this is the internet by the way, the "fact" label can be used loosely and easily on half-truths) out of any given situation and don't put two and two together in your own head, you're going to miss a lot.
7. Carlos (unregistered)
Whats so bad about the deal going through. It only means better signal, plus t-mobile is getting behind the big 3. so you might as well buy it. Also Sprint only has to step up there game, into a faster pace. Look at Verizon, they dont really care about the deal going through, they are just stepping it up a little more and competition will be the same as always. And just because i said this, doesnt mean i am some sort of fanatic. You just gotta look at the real facts, no offense.
8. remixfa (Posts: 13901; Member since: 19 Dec 2008)
a merger with sprint would have been palatable.. though technologically the hardest because of all the different networks involved. It would have put a value carrier up with the big boys. With an ATT merger, you have the big boys getting bigger and the value carrier marginalized. That will make it much harder to find a great deal on phones and plans at the same time. With sprint so far behind they may find it much harder to get top tier phones.
9. Carlos (unregistered)
Why cant sprint just buy a smaller carrier. even if they bought T-mobile they would have wasted SOOO much on inverting T-mobile technolgy into their own, which is an unecesary lost in money, when they can use that money to get better. And people keep forgetting that AT&T is not the same AT&T as 10 years ago, maybe they forgot AT&T got bought by someone else.
13. ngo2dd (Posts: 754; Member since: 08 Jul 2011)
Because all the other carrier are regional. Name one other national carrier?
17. dallas90733 (Posts: 35; Member since: 06 Mar 2011)
What would had happen:
Sprint & T-mobile would profit from CDMA and GSM (customers happy also) until LTE would combine both company into one; which would had force Verizon and AT&T, to lower their price and not to implement this stupid data tier plan for LTE,
22. Attsukballz (unregistered)
Plus the small carriers uses the national carriers network just to go national. Doesn't make sense buying a regional carrier if they mainy use Verizon...
24. remixfa (Posts: 13901; Member since: 19 Dec 2008)
They could still buy Metro. They are CDMA and LTE as well. It could be a great in road to already place LTE structures. Metro is slowly becoming a national carrier. They are already in most cities.. though they are still quite spotty in coverage. How many customers does metro have? like 10 or 15 million?
It wont catch them up to ATT/VZW but it will help.
20. cakvalasc (Posts: 17; Member since: 24 Jan 2010)
The bottom line is, this merger will not be good for anything. Yes there will be more coverage, but also inflated prices above market average and minus 1 carrier for the competition. Verizon knows this and wants it to happen as its their pricing model as well.
25. roberttank (unregistered)
Echt, the sprint-tmo uniting would individual been some many concerned and would score likely stayed operative as sperate companies at slightest on the position word. Between them you would eff GSM,gprs, hspa+,cdma,iden,wimax,1xrtt, and the whole rainbow of technologies.
Frankly if that happened, i rattling welcome sprint to modify its CDMA to GSM/HSPA+ (which would bang prefab it a larger and writer dumb scheme than ATT straightaway), site everything else by gift everyone on any another signalize a disembarrass delegate to a GSM phone and shutting thrown those towers, and then concentrate on LTE. That way they would change had a 42mb/s HSPA+, a 7.2mb/s HSDPA(3g), and a 100mb/s LTE signal. That would acquire been one monumental and express traveller that was ameliorate than ATT or VZW. That would mickle is deed to hump the opposition belief. veto competition and vine forthcoming design.
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27. VZW4LIFE (Posts: 33; Member since: 11 Jun 2011)
If the AT&T & T-Mobile merger receives, FCC, approval as planned. I think, Sprint's best shot at remaining a competitive wireless provider, is to put serious effort & money into developing their proposed LTE network, so that it is on par with its competitors Verizon & AT&T. Sprint, also needs to overhaul their customer service, so that the level of customer satisfaction is the equivalent or better than that of Verizon & AT&T customers. After Sprint accomplishes this they could make bids to buy-out companies, U.S. Cellular & Metro PCS, (it would probably be a good idea for Sprint to hold off on bidding for these two companies, until they complete the build-out of their LTE networks also.) It would likely take Sprint, two to three years, to complete the improvements I listed above. Over that time period it's likely Sprint's, U.S. Cellular's, & Metro PCS's, "Total Customer Base," would increase by approximately a million customers. This would give Sprint, approximately 53 million customers; U.S. Cellular, approximately 7 million customers; & Metro PCS, around 10 million customers. The combined, "Total Customer Base," of Sprint, U.S. Cellular, & Metro PCS; would equal about 69 million customers, enabling them to better compete with AT&T & Verizon.
28. VZW4LIFE (Posts: 33; Member since: 11 Jun 2011)
I'd like to make a correction, the about 69 million customers, is supposed to say about 70 million customers.