T-Mobile's consumer friendly initiatives could keep Sprint and SoftBank away

T-Mobile's consumer friendly initiatives could keep Sprint and SoftBank away
With recent talk suggesting that SoftBank is ready to bid for T-Mobile, U.S. regulators might not be so quick to approve such a deal. Right now, T-Mobile is keeping the industry in the U.S. honest thanks to its consumer friendly attitude, which has resulted in the nation's fourth largest carrier being its most innovative. Call it the tail wagging the dog if you'd like, but T-Mobile was the operator that started the others on a path toward unsubsidized equipment sales and the end of the two-year contract. T-Mobile is the only one of the four major U.S. carriers that actually has completely done away with subsidized pricing.

T-Mobile also was the first to allow annual phone upgrades, and while the other major carriers tried to catch up with T-Mobile, only the latter offers multiple upgrades in a single year. Other "firsts" credited to the carrier include eliminating data roaming charges for its customers in over 100 countries and offering tablet users 200MB of free data a month for life. In its most recent promotion, T-Mobile will give those who switch to them from Verizon,Sprint and T-Mobile, a $300 credit toward a new phone and will also pay the ETF that is charged to those who break a two-year contract with one of the other three major carriers. All of this innovation has paid off. Over the last two quarters, the company has gained over 1.8 million new subscribers and is adding two new subscribers for each one it loses to AT&T.

It is these consumer friendly actions that would make U.S. regulators think twice before giving approval to an offer to buy T-Mobile. If Sprint (78% owned by SoftBank) and T-Mobile merge, most believe it would end the latter's innovative ways. Roger Entner, an analyst at Massachusetts based Recon Analytics questions why regulators would even allow a slow moving company like Sprint to purchase a fast mover like T-Mobile. The answer to that question has to do with the amount of spectrum each of the carriers own. A Sprint-T-Mobile combination would still have fewer customers than Verizon and AT&T, but would have twice the spectrum owned by the top two U.S. mobile operators.

While SoftBank has been scouring the financial world, looking for financing for a T-Mobile bid, the executives at T-Mobile are helpless to prevent a deal from happening. Even outspoken T-Mobile CEO John Legere, who has symbolized the company's emergence with his witty attacks on rivals and his pro-consumer attitude, can't stop a deal from happening. Germany's Deutsche Telekom owns the vast majority of T-Mobile. If another company makes a deal with them to buy the telecom firm's shares in T-Mobile, the deal could only be halted by U.S. regulators.

The Justice Department and the FCC would have to both sign off on a deal to buy T-Mobile. It was the Justice Department's decision to fight AT&T that forced the number two carrier to pull out of its $39 billion deal to buy T-Mobile in 2011. As a result of pulling out of the acquisition, AT&T had to give T-Mobile some spectrum and $3 billion in cash, which ironically helped make T-Mobile the force to be reckoned with that it is today. And while the Justice Department might seem desirous of keeping the competitive status quo, one former Justice Department antitrust attorney says that an argument could be made otherwise. Allen Grunes, now in private practice, believes that Sprint and T-Mobile could make a case for approval of a merger by saying that the two carriers combined would be a more "effective" competitor to Verizon and AT&T.

source: Bloomberg



17. reckless562

Posts: 1153; Member since: Sep 09, 2013

dammmm!!! all the sprint hate!! where the F do u all live??? butt pfhuck Egypt? caves?? in Southern californa sprint is great

15. joseram695

Posts: 79; Member since: May 28, 2012

Stay away Softbank/sprint!!!!! fix your own carrier first (sprint )before trying to acquire another one!

13. SprintGuy26

Posts: 229; Member since: Mar 21, 2011

at the rate t-mobile is going they will be number 3 by this time next year easy....sprint wont be able to buyt-mobile anytime soon so all the hype needs to just chill....i know that t-mobile will gain alot of sprint customers where ever theres t-mobile coverage,it doesnt even have to be LTE or "4G" because t-mobiles 3G is already 100x faster than sprints LTE now


Posts: 110; Member since: Jun 26, 2013

This is very interesting because technically its no longer Sprint in charge it's Softbank. They are the ones looking for fiancing not Sprint. They are holding the reins and are making the charge for T-Mobile. Who is to say that Softbank will not keep T-Mobile's business model which has proven to attract more customers & is more competetive & stable. I'm no guru but T-Mobiles 67% vs Sprint's 78% technically gives more say to T-Mobile than Sprint. I'm sure Softbank is going to do what's best for it's investments with so much on the line. I don't think Sprint will have much say in the end. Their in the same position as T-mobile in fact their worse again 78% vs 67%

14. Doakie

Posts: 2478; Member since: May 06, 2009

I didn't even think about it till now; how bad of a purchase Sprint was for Softbank. It's like buying a lemon car. Sprint sucks so bad in so many ways and Softbank probably didn't even know they were so horrible.

9. true1984

Posts: 871; Member since: May 23, 2012

Damn your bad coverage T-mobile. I really want to switch but i cant, not in my area anyways.

8. Killertech2099

Posts: 148; Member since: Sep 28, 2013

Yeah if they buy Tmobile so be it but i want t mobile controlling, sprint sucks

7. Kishin

Posts: 706; Member since: May 30, 2013

I wish I could stop it, I Love T-Mobile.

5. tyger11

Posts: 300; Member since: Oct 29, 2012

I have no problem with _Softbank_ acquiring T-Mobile, as long as they don't put any Sprint execs in charge of the company. If Softbank were to acquire T-Mo, and put them in charge of Sprint, that would be a great move. Sprint execs need to be thrown under the bus.

4. corporateJP

Posts: 2458; Member since: Nov 28, 2009

Sprint can screw up a one-car funeral. Stay away from T-Mobile, Sprint and Softbank. Fix you own sh*t first.

12. JerryTime

Posts: 468; Member since: Nov 09, 2013

Yeah Sprint getting their hands invloved would be the end of T-Mobile and their awesome competitive direction as we know it. Sprint has to be the single worst service provider ever born into this world besides U.S. Cellular.

16. reckless562

Posts: 1153; Member since: Sep 09, 2013

nooo cingular....lols

2. PapaSmurf

Posts: 10457; Member since: May 14, 2012

I like what T-Mobile is doing right now, but if SoftBank can help fund a larger rollout of LTE and coverage, by all means buy 67% of T-Mobile!

1. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Allen Grunes would like to charge $1,000/hour to represent SoftBank in its attempt to buy T-Mo. A Sprint + T-Mo combination is not going to happen until after 2016. And even then, the Rs would have to win the election for POTUS. Net-net, T-Mo is not going to be acquired by SoftBank anytime soon. Maybe T-Mo will get another $3 billion in break-up fees? Not a bad way to score some free cash.

3. Jinto

Posts: 436; Member since: Jan 15, 2014

You comment a lot

6. PapaSmurf

Posts: 10457; Member since: May 14, 2012

You have three posts in less than a hour. This would be my 4621st post since May of 2012.


Posts: 109; Member since: Mar 18, 2012

Agreed. PapaSmurf, it has been approximately 15,000 hours since May 2012. At the rate Jinto is posting (3 per hour), he/she will have 45,000 posts in the next 15,000 hours. You're welcome. : )

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