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posted by LaminatorX on Tuesday March 11 2014, @07:07PM   Printer-friendly
from the Opposite-Day dept.

youngatheart writes:

"When does merging two companies make for more marketplace competition? When they aren't big enough to compete with the other giants in the industry. At least that's the logic behind the argument that Sprint should be allowed to acquire T-Mobile. I'm wondering what this means for MetroPCS users like me now that we're T-Mobile users by the previous merger."

Related Stories

T-Mobile and Sprint Merger Called Off After Months of Talks 10 comments

T-Mobile and Sprint, the third and fourth largest U.S. wireless carriers respectively, have called off merger talks, although they have left the door open in a joint statement:

Sprint Corp and T-Mobile US Inc said on Saturday they have called off merger talks to create a stronger U.S. wireless company to rival market leaders, leaving No. 4 provider Sprint to engineer a turnaround on its own.

The announcement marks the latest failed attempt to combine the third- and fourth-largest U.S. wireless carriers, as Sprint parent SoftBank Group Corp and T-Mobile parent Deutsche Telekom AG, show unwillingness to part with too much of their prized U.S. telecom assets. A combined company would have had more than 130 million U.S. subscribers, behind Verizon Communications Inc and AT&T Inc.

The failed merger could also help keep wireless prices low as all four providers have been heavily discounting their cellphone plans in a battle for consumers. "Consumers are better off without the merger because Sprint and T-Mobile will continue to compete fiercely for budget-conscious customers," said Erik Gordon, a Ross School of Business professor at the University of Michigan.

The companies' unusual step of making a joint announcement on the canceled negotiations could indicate they still recognize the merits of a merger, keeping the door open for potential future talks.

Also at Bloomberg, NYT, and Ars Technica.

Previously: Sprint: Purchase of T-Mobile Promotes Competition
Inside the Plan to Pull Sprint Out of its Death Spiral

Related: Sprint the Only US Telecomm to Challenge NSA
T-Mobile and Verizon Mobile Plans Change; Probably Not Better for Consumers
Are True Burner Phones Now Impossible in the USA?
T-Mobile's New 600 MHz Network Rollout Begins This Summer
Verizon Wireless Divides Unlimited Plan Into Three Worse Options


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  • (Score: 5, Insightful) by gishzida on Tuesday March 11 2014, @07:12PM

    by gishzida (2870) on Tuesday March 11 2014, @07:12PM (#14775) Journal

    As long as carriers are permitted to lock users into contracts... there will be no competition... Then there is the problem of DATA pricing... We are getting screwed in the U.S. both on service pricing and DATA pricing... We are not the "Land of the Free"

    • (Score: 3, Interesting) by nitehawk214 on Tuesday March 11 2014, @08:58PM

      by nitehawk214 (1304) on Tuesday March 11 2014, @08:58PM (#14851)

      T-mobile is one of the biggest providers of not locking users into contracts. My guess is once this merger is bribed through, my $30 5GB no-contract prepaid plan is going to go away.

      --
      "Don't you ever miss the days when you used to be nostalgic?" -Loiosh
      • (Score: 5, Insightful) by frojack on Tuesday March 11 2014, @09:09PM

        by frojack (1554) on Tuesday March 11 2014, @09:09PM (#14865) Journal

        You are probably right, the price war stops as soon as the merger happens. Right now the little carriers are leading the charge to better prices. Once they become big consolidated carriers the incremental damage of a price drop parlays into hundreds of millions of dollars and suddenly the fervor for price reductions disappear.

        Besides, in spite of all these so called price cuts, cell bills have actually been going UP.
        http://www.techzone360.com/topics/techzone/article s/2014/03/10/372745-us-mobile-bills-rise-even-as-p rice-war.htm [techzone360.com]

        --
        No, you are mistaken. I've always had this sig.
      • (Score: 2, Informative) by akinliat on Tuesday March 11 2014, @09:46PM

        by akinliat (1898) <akinliatNO@SPAMgmail.com> on Tuesday March 11 2014, @09:46PM (#14891)

        I'm not sure that this would be the case, and even if it were, there are other options available, namely the various MVNOs. For instance, my carrier is Ting (who you might better know as Tucows). While they still have usage tiers, they basically charge me on a pay-as-you-go basis. If I use 100 minutes or less, it's $3. If I use between 100 and 500 minutes, it's $9. The same goes for data and text. Of course, it doesn't hurt that I've been doing business with Tucows for years, so I know that I can count on them, but they're not the only MVNO. Virgin Mobile offers similar "plans."

        Both of these carriers use the Sprint network. Verizon and AT&T have their own MVNOs that use their networks. If you don't like what's available from the major carriers (and I'll admit that the options do suck), then you probably should take a look at the MVNOs. It's likely that you'll find better deals, and you'll still be using the same cellular network.

      • (Score: 0) by Anonymous Coward on Wednesday March 12 2014, @05:36AM

        by Anonymous Coward on Wednesday March 12 2014, @05:36AM (#15045)

        T-mobile is one of the biggest providers of not locking users into contracts.

        I had a Sprint PCS phone in 2000, and once they started promoting their "evenings and weekends" deal, the network became all but inaccessible. I got constant "system busy" messages trying to dial out.

        When I called Sprint to address the lack of service, they basically told me to live with it. They weren't going to change anything. So, I told them to cancel my contract. They told me I'd have to pay an early termination fee. I told them to stuff it, since they broke the contract first by not providing the service I was paying for.

        So they referred me to a collection agency.

        I swore then that I would never do business with those sons of bitches again, and if they buy T-Mobile, I would hate to give up my iPhone 4s which I waited so long for T-Mobile to support. Hope it doesn't happen soon.

    • (Score: 2) by davester666 on Tuesday March 11 2014, @09:14PM

      by davester666 (155) on Tuesday March 11 2014, @09:14PM (#14869)

      Hey, the carriers are free to charge you extra to transfer data from your phone to your computer...

  • (Score: 2, Interesting) by hybristic on Tuesday March 11 2014, @07:19PM

    by hybristic (10) on Tuesday March 11 2014, @07:19PM (#14783) Journal

    I love Sprint. I have heard mixed reviews on them, but in terms of customer service I have never had an issue with them. When I was between jobs, I wouldn't even get a late notice + charge for 15 days after my bill was due. They let me go 3 months before threatening to shut off my service, and when I called they told me if I made a minimum payment of X they would keep my services on, and that they would change my date of payment to whatever lined up best with my pay periods. I have never had a company do this for me. Now the trade of is spotty as fuck service, and practically non-existent 4G. One thing I actually liked about T-Mobile was that service was pretty wide, but speeds would just crap out. I also like their pay as you go option now, but Sprint has offered a similar plan so all things are pretty equal. I am excited to see where this goes. If it increases the service areas of Sprint I am all for it. I have had nothing but negative experiences with AT&T and Verizon, although their services are clearly better.

    • (Score: 1) by Reziac on Wednesday March 12 2014, @02:23AM

      by Reziac (2489) on Wednesday March 12 2014, @02:23AM (#14990) Homepage

      I had T-Mobile for a while. All I can say to a buyout is good riddance. Customer service isn't, and they don't tell you up front that they DO throttle lower-cost accounts -- those accounts will get poor or no connection in the same place that more-expensive plans get five bars. Voice of experience.

      --
      And there is no Alkibiades to come back and save us from ourselves.
      • (Score: 1) by hybristic on Wednesday March 12 2014, @06:35AM

        by hybristic (10) on Wednesday March 12 2014, @06:35AM (#15062) Journal

        Yeah I am hoping that if this goes through, Sprint keep on the track that it is now. It would be nice to have the infrastructure but with the quality service that I have gotten from Sprint. I just hope that they won't cut corners with the influx of new customers. Their customer service is what has kept me loyal, if they just bring on a whole bunch of people to handle the new load and sacrifice the quality, I would absolutely consider switching services.

  • (Score: 5, Insightful) by Random2 on Tuesday March 11 2014, @07:20PM

    by Random2 (669) on Tuesday March 11 2014, @07:20PM (#14784)

    It depends on what you use your phone for of course, but the 'pay-as-you-go' area has plenty of competitors.

    And not to sound like a shameless market plug (the only disclaimer being that I have a plan with them) I found Page Plus [pagepluscellular.com] to be one of those reasonable alternatives. 300 minutes a year for $40 dollars a year.

    Of course, one's needs dictate what type of phone and plan they get, but I've always had trouble understanding how people justify sinking hundreds of dollars a month into something like a phone; especially when most of the functions are already covered by other things.

    --
    If only I registered 3 users earlier....
    • (Score: 1) by GeminiDomino on Tuesday March 11 2014, @07:24PM

      by GeminiDomino (661) on Tuesday March 11 2014, @07:24PM (#14790)

      300 minutes a year? O_o

      Was that a typo?

      --
      "We've been attacked by the intelligent, educated segment of our culture"
      • (Score: 2) by Random2 on Tuesday March 11 2014, @07:31PM

        by Random2 (669) on Tuesday March 11 2014, @07:31PM (#14796)

        No, it was correct. I don't use my phone much, so even with that I have a surplus.

        They do the thing where text messages and data are basically considered fractions of minutes, but using Google Voice to forward the calls solves any problem I'd have there.

        --
        If only I registered 3 users earlier....
        • (Score: 2) by Random2 on Tuesday March 11 2014, @07:45PM

          by Random2 (669) on Tuesday March 11 2014, @07:45PM (#14806)

          Err.. well, technically 400/$40, but you know.

          plan details [pagepluscellular.com]

          Like all pre-paid deals, your minutes are only good for a certain period of time (generally 3 months), meaning you get 4 for the year and enter a new access combo every so often. A minor inconvenience, but one I'll take to saving literally a thousand of dollars every year. They, like most pre-paid companies, also let balances roll over.

          --
          If only I registered 3 users earlier....
    • (Score: 2, Interesting) by GeminiDomino on Tuesday March 11 2014, @07:27PM

      by GeminiDomino (661) on Tuesday March 11 2014, @07:27PM (#14791)

      Fun fact... if you go to parents Page Plus link with noscript enabled, combined with the 300 mins/year, you'll get the distinct impression that it's a troll/spoof site. XD

      --
      "We've been attacked by the intelligent, educated segment of our culture"
      • (Score: 3, Informative) by Random2 on Tuesday March 11 2014, @07:33PM

        by Random2 (669) on Tuesday March 11 2014, @07:33PM (#14797)

        I know, I was incredibly leery about it at first too, but I have a phone and it takes calls, so that's about as validated as I'll get.

        They apparently rent time on Verizon's network, which is (ironically?) cheaper than going with the deals Verizon offers. Not sure why, but I don't complain.

        --
        If only I registered 3 users earlier....
        • (Score: 1) by GeminiDomino on Tuesday March 11 2014, @08:35PM

          by GeminiDomino (661) on Tuesday March 11 2014, @08:35PM (#14831)

          Nah, it's not a matter of being leery.They apparently use Javascript to control their stylesheets, so when you go without noscript, instead of seeing 29.95 (Sup tag isn't supported here), the front page says 500MB data + 1200 minutes for $2995.

          --
          "We've been attacked by the intelligent, educated segment of our culture"
    • (Score: 1) by Reziac on Wednesday March 12 2014, @02:26AM

      by Reziac (2489) on Wednesday March 12 2014, @02:26AM (#14991) Homepage

      Then there's Zact, which is pay-for-what-you-use.
      http://www.zact.com/ [zact.com]

      I haven't tried it yet, but I think I'm going to. (The owner is a client of mine, so I have at least a little confidence in it...) I use a phone only about two days a month, so nothing else makes sense for me.

      --
      And there is no Alkibiades to come back and save us from ourselves.
  • (Score: 3, Interesting) by MrGuy on Tuesday March 11 2014, @07:22PM

    by MrGuy (1007) on Tuesday March 11 2014, @07:22PM (#14787)

    "Yeah, we know this is bad for customers, but we want you to let us do it anyways?"

    The argument that consolidation can lead to more effective competition isn't novel. It's not impossible that they're RIGHT on this one. We'd likely be better off with three viable carriers than two viable carriers and two entities that can't compete, IF they truly can't compete. But I'd hardly just accept the word of one of the parties to the deal as proof that that's the situation.

    A consensus of industry analysts or economists who cover the telecom industry would go a lot further with me than the word of the CEO of one of the firms in question...

    • (Score: 3, Insightful) by GeminiDomino on Tuesday March 11 2014, @07:33PM

      by GeminiDomino (661) on Tuesday March 11 2014, @07:33PM (#14798)

      We'd likely be better off with three viable carriers than two viable carriers and two entities that can't compete, IF they truly can't compete.

      And then there's the cynical angle: even if they ARE telling the truth and they "can't compete," it doesn't necessarily follow that if allowed to go ahead that they will compete. I think it's more likely that they hope to be big enough to be able to throw their weight behind the same abusive shit AT&T and Verizon are pulling^Wdefined by.

      --
      "We've been attacked by the intelligent, educated segment of our culture"
  • (Score: 2) by GungnirSniper on Tuesday March 11 2014, @07:36PM

    by GungnirSniper (1671) on Tuesday March 11 2014, @07:36PM (#14799) Journal

    So Coke, Pepsi, and RC Cola? Sprint plus T-Mobile won't be enough to crack the 100 million user market share that Verizon and AT&T have. [fiercewireless.com]

  • (Score: 2, Insightful) by tbuddy on Tuesday March 11 2014, @07:42PM

    by tbuddy (932) on Tuesday March 11 2014, @07:42PM (#14804)

    Sprint is the best of the carriers as far as I'm concerned in regards to MVNOs. They allow virtually all the devices to be used on them and they even let them use their 4G signal. Better than Verizon which is limited to 3G for MVNOs and require you to flash your phone (usually a Sprint phone) to be able to use anything other than a dinosaur. That is unless you want to use Straight Talk which is really not much of a savings over Verizon. I've used PagePlus, Ting, and Republic and Sprint is by far a nicer company than Verizon for an MVNO guy. Customer service on MVNOs were better too, but it is pretty hard to beat Sprint phone support for being terrible.

  • (Score: 1) by sl4shd0rk on Tuesday March 11 2014, @08:17PM

    by sl4shd0rk (613) on Tuesday March 11 2014, @08:17PM (#14818)

    AT&T, Comcast, Time Warner... all monopolies trying to get fatter and fatter which end up giving the consumer choices equivalent to the area on the head of a pin. It really doesn't matter which country because the dick-moves are the same all over. Eat up the competition and the consumer is basically extorted by one big monopoly. Microsoft should have patented this decades ago; Either litigating the competition into bankruptcy, or buying them out straight away. Embrace, Extend Extinguish. No more competition. Consumer must come to you for everything and now you can name your price.

    The number of people who would drop Sprint or T-Mobile over this is small compared to the overall number of sheep in the herd who will just put-up and shut-up. Incidentally, there isn't really any other place to go if you think you can just find an alternative. Ting, StraightTalk, SimpleMobile -- are just third-parties renting bandwidth on AT&T or Sprint Backbone. I expect a revised TOS which offers free unlimited everything in exchange for limetime contract with ETF punishable by death.

    • (Score: 1, Informative) by akinliat on Tuesday March 11 2014, @10:04PM

      by akinliat (1898) <akinliatNO@SPAMgmail.com> on Tuesday March 11 2014, @10:04PM (#14898)

      It's not the monopolies that are the problem, it's the level of regulation. Ma Bell was far more of a monopoly than almost any company today. It was effectively a branch of the US government. Yet the telecommunications network that Ma Bell built was the best in the world. The corporate culture was firmly dedicated to the notion of public service and the research that came out Bell Labs won Nobel prizes.

      They invented this little thing called the transistor, and then charged just a $25,000 fee for production under license. Ever hear of ABC, NBC, and CBS? When the TV first came along and the networks were trying to figure out how to get shows to their affiliates, AT&T gave them connections for free as a public service.

      We have some really odd religions in the US, from Shakers to Primitive Baptists to the Church of the Sub-Genius, but I've always thought that the strangest of them all was the belief in the marketplace as something beneficial to the consumer.

      • (Score: 1) by sl4shd0rk on Wednesday March 12 2014, @02:37PM

        by sl4shd0rk (613) on Wednesday March 12 2014, @02:37PM (#15284)

        It's not the monopolies that are the problem, it's the level of regulation.

        I think you mean that to read "lack of regulation"? Indeed. Any time you give an 800lb gorilla all the bananas it wants things are going to go badly for everyone but the gorilla.

        AT&T gave them connections for free

        Sometimes "free" isn't always good for the consumer. Sometimes "free" is used as a way of saturating the market with your product/service. Eg: When Microsoft started giving away IE back in the '90s and bundling it with Windows, it was the end of Netscape. Point being, "free" should not be used as an indicator of best choice. Yes, the same goes for FOSS.

        • (Score: 1) by akinliat on Wednesday March 12 2014, @09:22PM

          by akinliat (1898) <akinliatNO@SPAMgmail.com> on Wednesday March 12 2014, @09:22PM (#15540)

          I think you mean that to read "lack of regulation"?

          Well, there's still, even today, a lot of regulation in the telecomm industry. It is perhaps less than it was, but that's because it used to be one of the most heavily regulated industries in the country -- and AT&T encouraged that level of regulation. It was one of the tools that originally established the monopoly.

          Sometimes "free" isn't always good for the consumer. Sometimes "free" is used as a way of saturating the market with your product/service.

          Absolutely true. However, in this case, the customers were the networks themselves, rather than consumers. In addition, there really was no market as such -- television was only just getting started. The free connections did shape the evolution of commercial television and the network affiliate model, but it's really hard to say what it might have looked like otherwise. More importantly, AFAIK, Ma Bell never did end up charging for these services. They were given away as a justification for Ma Bell's monopoly.

          That was the great thing about Ma Bell. In order to keep the monopoly, it would do all sort of things that were in the public interest, and we all would benefit.

    • (Score: 0) by Anonymous Coward on Wednesday March 12 2014, @12:49PM

      by Anonymous Coward on Wednesday March 12 2014, @12:49PM (#15221)

      Consumer must come to you for everything and now you can name your price.

      There is one other option for the consumer: walk away. Just walk away.

      The cable companies are learning that people really will simply cut their cords and do without. The cell companies might soon be in for a similar lesson.

  • (Score: 3, Insightful) by Thexalon on Tuesday March 11 2014, @08:45PM

    by Thexalon (636) on Tuesday March 11 2014, @08:45PM (#14838)

    When does merging two companies make for more marketplace competition?

    Never.

    It's that simple: 2 or more struggling companies are invariably going to be more competitive with each other and with the bigger players than 1 not-struggling company. They're going to fight like crazy, and the way companies fight is by offering better prices and services for customers in the market. This is good for customers.

    This is a settled economics question, as much as anything is settled. The more sellers you have in a market with a lot of buyers (in this case, everyone in the US), the smaller the difference between the marginal cost of production and the actual selling price, which is the definition of an efficient marketplace.

    --
    The only thing that stops a bad guy with a compiler is a good guy with a compiler.
  • (Score: 2) by istartedi on Tuesday March 11 2014, @09:01PM

    by istartedi (123) on Tuesday March 11 2014, @09:01PM (#14855) Journal

    Unicorns, sunshine, OMG Ponies!!!, World Peace, cute little baby laughter, and butterflies.

    --
    Appended to the end of comments you post. Max: 120 chars.
  • (Score: 3, Insightful) by VLM on Tuesday March 11 2014, @09:23PM

    by VLM (445) on Tuesday March 11 2014, @09:23PM (#14878)

    Anyone have any real historical stats on telecom mergers affect on end user prices?

    Not, "two railroads a century ago" or "My ivory tower economics professor claimed ..." or "A talking head was hired to say..." but actual historical data.

    All I can think of is the legacy POTS landline provider where I live has been merger'd up three times since the breakup in the 80s... each time the customer price has tripled. My first POTS line in '91 was something like $5/month, and now that only old people have landlines, I've heard my uncle in law pays about $50/month, so I don't think a nine-tuple is all that unlikely over 20 years of endless mergers.

    This "seems" to be the case with cable, although maybe not tripled each time. All those multimillion dollar bonuses and bank financing fees do add up, after all. My parents cable bill was about $25 and equivalent video only service now would set you back about $90 or so.

    I don't think you can blame inflation for much of it, surely your median middle class income hasn't quadrupled or nine-tupled in 20 years.

    • (Score: 1) by damnbunni on Tuesday March 11 2014, @11:15PM

      by damnbunni (704) on Tuesday March 11 2014, @11:15PM (#14932) Journal

      Odds are your uncle paying $50 a month has lots of services that weren't even offered when you got your POTS line in '91. (My POTS in '91 was about $15 and didn't even include unlimited local calls, much less long distance.)

      AT&T will install a basic POTS line for $24/month with no fancy add-ins these days. My mom has one that's a bit less than that; she gets some sort of discount.

      You can still get cable TV for under $30 a month in most places, if you ask for the 'basic cable' or 'digital basic' package, and it probably still has more channels than your parents got in the '80s.

      There's still nothing worth watching on it, but THAT hasn't really changed in the last thirty years!

      • (Score: 1, Interesting) by Anonymous Coward on Tuesday March 11 2014, @11:53PM

        by Anonymous Coward on Tuesday March 11 2014, @11:53PM (#14949)

        The cheapest POTS line money can buy, with literally NOTHING extra, and bending over backwards to pick a long-distance carrier who doesn't themselves impose monthly minimums or baseline fees, is at least $30/month in South Florida from AT&T. And for that $30/month, they'll rake you over the coals at every possible opportunity, and charge extortionate amounts of money for semi-local calls (like Miami to Boca Raton). And adding U-verse's VOIP service to an existing TV+Internet plan isn't any cheaper. You'll get more features for your $30/month monthly charge from U-verse, but they're bound and determined that $30/month is going to be the least they'll charge anyone for anything.

        I'd switch to an independent VoIP provider, but my experience with two prior to U-verse is that 7 times out of 10, if I picked up the phone at 9am to dial into a bridge for work or something, I got... no dialtone... and had to reboot the goddamn VoIP adapter to be able to use the phone again. Wait... it gets worse. The same thing still happens with U-verse. Not as often (maybe once in 3-4 months), but it's like the goddamn router says, "Hey, he hasn't used me in a few weeks, I think I'll just go into power-saving mode and shut myself down until he happens to notice eventually".

        How did we get to this low point? 25 years ago, as Hurricane Andrew destroyed half of South Florida, people made long-distance calls from houses that were disintegrating around them, and came home to piles of rubble with "off-hook" noise coming from the phones. We had a phone network that was LITERALLY built to keep working if downtown Miami and Homestead Air Force Base were destroyed by nuclear bombs. BellSouth central offices were literally concrete bunkers. Now, even little tropical storms that are barely big enough to close public schools for a day takes down most of South Florida's residential phone and internet service for at least a few hours.

        We need municipal fiber... buried, and provided with 48vDC@1A that's not dependent upon FPL for operation. Maybe even through a cookie to Comcast & AT&T, and tell them they can stop it in their service area by providing the same level of service (with 5-nines uptime, including the backup power) themselves... backed up by LOS agreements with teeth that will leave them bloody if they dare to neglect the network into failure.