The Master Deal Negotiators at T-Mobile

The Master Deal Negotiators at T-Mobile. If the acquisition doesn't get regulatory approval, according to the terms of the agreement, T-Mobile gets:
1. $3 Billion (That's Billion with a "B")
2. Wireless Spectrum from AT&T
3. A Roaming Agreement

So is there any downside for T-Mobile? I don't think there is any downside, just upside. AT&T bears all of the risk as best as I can tell. How could T-Mobile have said no?

What are Sprint & Verizon's next moves? Does Verizon acquire Sprint? They say they aren't interested and I question whether the Regulators would allow two deals of this size to be completed in succession.

So does Sprint go out and buy and integrate all of the other smaller regional and niche players out there like Leap & MetroPCS? Can they raise the cash and can they make it work?

Or will someone who's an outsider like Google come along and acquire Sprint to get into the wireless business?

Should be interesting. Stay tuned for more developments. Thanks for checking out my post.

Jim

Changes in the Wireless Field - AT&T to Buy T-Mobile USA for $39 Billion

WOW! To quote the Grateful Dead's song, Truckin' "What a long strange trip it's been!" I have been wondering lately what was going on with the Sprint/T-Mobile Acquisition talks and BOOM, AT&T snatches T-Mobile, the smallest of the four major wireless carriers away from Sprint (see link nearby to NY Times story).

This makes a lot of sense in many ways. T-Mobile has been struggling for a while to increase their market share. Both AT&T & T-Mobile use GSM technology, so the networks are compatible. There undoubtedly be cost savings. The combined wireless giant will have lower network costs since they both use GSM. They will also be able to spend less on Marketing & Advertising, which is a large expense.

What will happen to Sprint now? They will now be a fraction of the size of the combined AT&T/T-Mobile Monster. They have been struggling with both churn and with not having the sexy iPhone. I understand Sprint's need to grow, but I thought after all the issues they had with Nextel and having to manage two incompatible networks (Sprint's CDMA & Nextel's iDEN) they would have been reluctant to go down the incompatible technology path again. I wonder how much of a factor that was for the T-Mobile execs in the merger talks.

What about Verizon? Just a couple weeks after they get a CDMA iPhone, they have to contend with this. They become a very distant second to the combined AT&T/T-Mobile. Will they now feel they have to acquire Sprint to stay in the game? Should be interesting...

Another interesting question is will this pass regulatory scrutiny? This will probably get looked over pretty closely by the regulatory bodies. I don't think it will be a quick review.

And what about the consumer? Will coverage be better with a more concentrated market? Will customer service a frequent pain point for consumers improve or deteriorate? Stay tuned. Time will tell.

Thanks for reading. Please drop me a line if you have any questions or suggestions for future posts.