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Why Sprints push for a T-Mobile merger will likely be in vai

And, of course, there is the ct that both the Justice Department and the FCC rejected AT&Ts acquisition of T-Mobile, stating that four nationwide carriers rather than three is most beneficial for competition. Regulators have essentially been slapping themselves on the back for rejecting the megamerger ween AT&T and T-Mobile.

Marguerite ReardonMarguerite Reardon has been a CNET News reporter since , covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies.


After a merger ween Comcast and Time Warner Cable, customers would have the same number of choices for high-speed Internet, TV, and phone service that they had before the merger. 内容来自dedecms

But I firmly believe it will be these auctions, more than a merger ween T-Mobile and Sprint, that will determine the te of the US wireless market. If Sprint and T-Mobile can get their hands on enough of this valuable spectrum and still have enough capital to build out their networks, the likelihood of one or both of these companies being able to unseat AT&T or Verizon is much greater.


T-Mobile execs make their Uncarrier pitch at CES .


Two important spectrum auctions are coming up over the next two years. There is the AWS- auction in September, which will auction higher-frequency spectrum. But since AWS is already so widely used, the spectrum licenses in this band are considered valuable because they could make roaming ween networks easier. Operators that use this frequency band could also benefit from a wider handset and network ecosystem. copyright dedecms

That said, Son may try to convince regulators and business leaders that a larger customer base and more business synergies will provide the necessary capital for the combined company to invest in acquiring new spectrum and build out its network. The problem is that regulators would have to believe that the combined companies would actually make good on these promises. That could be tough given Sprints disastrous past experience integrating the Nextel network with the Sprint assets.


First, at a basic level, the wireless market is r more competitive than the fixed line broadband market. In many metropolitan areas there are at least four choices for wireless service, plus dozens of operators reselling service from one of the big four operators. 本文来自织梦

By contrast, cable markets were designed as monopolies. Years ago, when cable companies came into communities to offer TV service, they were granted exclusive franchise agreements. And so for years, the cable operators were prohibited from building networks and competing in another cable companys territory. As a result, Comcast and Time Warner Cable essentially do not overlap in any meaningful way when it comes to their network or customer base.


Despite the ct that regulators have already expressed their skepticism of a and policy leaders gathering in Why Sprints push for a T-Mobile merger will likely be in vainWashington, DC, at a US Chamber of Commerce event on March .

commentary Its clear the powers that be at Sprint arent willing to give up on a bid for T-Mobile. But what are the companys chances of headway in convincing regulators to accept a deal? 织梦好,好织梦

Once Softbank CEO and Sprint Chairman Masayoshi Son gets a bee in his bonnet,调查苏贝尔斯遗址 hes apparently a hard man to discourage. 织梦好,好织梦

Why Comcast-Time Warner Cable and not Sprint-T-Mobile?

The situation is very different for Comcast and Time Warner since the companies dont overlap at all in terms of their footprint. If the two companies merged, there would be no loss of a competitor in any single market. In other words, consumers living in Time Warner Cables territory never had the choice of subscribing to Comcast. Likely their only choice has been Time Warner Cable. If they were lucky they might be able to choose a satellite provider like Dish for TV or a telecom such as AT&T and Verizon, which has been building high-speed broadband in both Comcast and Time Warner Cable territory to compete.

So what does this all mean in assessing whether combining Sprint and T-Mobile would actually benefit consumers or not? T-Mobile is headway with its Uncarrier strategy. The . million customers it added to its network last year came from other carriers. So its clear that the lower prices and marketing message are resonating with some consumers. But the company still isnt able to persuade many customers who otherwise would be very willing to try the service, because it simply doesnt offer coverage where these customers live, work, or travel.


Some people have suggested that Son may be feeling emboldened by what appears to be the Department of Justices and Federal Communications Commissions willingness to consider a merger ween the No. and No. largest cable operators in the US. But the truth is that comparing these two mergers is a lot like comparing apples and oranges. Yes, theyre both fruit, but theyre very different.


What this means in terms of assessing whether a merger is good or bad for competition is that in the case of the wireless market, you typically have at least four major players in most major markets: AT&T, Verizon Wireless, T-Mobile, and Sprint. There are few markets where T-Mobile and Sprint do not overlap. So when you combine these companies, customers in those markets that were once served by four major wireless operators will now have only three choices.


The second auction is the broadcast TV spectrum in the MHz frequency band. This is the last bit of unused low-frequency wireless spectrum that is likely to come up for bid. Its going to be a complicated auction to design given that there will be an incentive reverse auction, which will determine which broadcast spectrum will be made available for wireless operators to bid.

The conclusion

So whats likely to happen? No matter how persistent he is, I still think that Softbanks Son will have a difficult time convincing regulators and policy experts, or even business leaders who understand the wireless market, that a merger ween Sprint and T-Mobile will create a single rival that can truly change the US wireless market. Based on the carriers current spectrum holdings and network footprints, there isnt much to be gained from this merger.


While the article said that Son isnt expected to mention T-Mobile by name, he is likely to continue his mantra about why its important for smaller wireless operators to combine efforts to compete against AT&etworks span the entire US.

Furthermore, because Sprint and T-Mobile compete in essentially all the same markets as well as lack coverage in most of the same markets, merging the two companies together does not achieve the one objective they each need to compete more effectively, which is to increase their footprints. In addition, because most of their individual spectrum holdings are in high-frequency bands, they dont gain spectrum assets that would help them build to unserved areas.

copyright dedecms

Instead, I think regulators will want to take a wait-and-see approach. I imagine the FCC, in particular, will do its best to create an environment over the next two years in which Sprint and T-Mobile will have an opportunity to purchase more wireless spectrum in the hopes that the companies can use these assets to further scale their businesses.


The Sprint innovation center in Burlingame, Calif. copyright dedecms

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