AT&T Accidentally Reveals That It Doesn't Need T-Mobile At All
from the oops dept
One of the key talking points from AT&T in support of the T-Mobile merger is that it "needs" T-Mobile's spectrum in order to expand its planned 4G/LTE networks to cover 97% of the population. And, there's no doubt that having T-Mobile's spectrum will make it easier, but that's not the same as it being necessary. As Broadband Reports has been pointing out for a while, Verizon has less spectrum than AT&T but can cover the same 97% of the population with it. Apparently a lawyer for AT&T accidentally posted a document to the FCC's site that more or less admits that AT&T doesn't need T-Mobile's spectrum, and that it could invest $3.8 billion to catch up to Verizon in terms of LTE coverage. $3.8 billion is a fair bit of money, but it's a hell of a lot less than the $38 billion that it's spending for T-Mobile. Yes, AT&T also gets T-Mobile subscribers with that, but it certainly raises questions about AT&T's claims that it would be too "costly" to invest to get to 97% coverage with its existing spectrum. As BBR notes, the timing of the letter also suggests that AT&T knew it was planning to buy T-Mobile when it decided to claim that it would "not" build out its network, perhaps recognizing that this would help give it a talking point for why the merger should be allowed.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: costs, merger, spectrum
Companies: at&t, t-mobile
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Oops
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where is that letter?
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Shame on us.
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This is good news
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What AT&T is paying for is the customer base, the existing networking (including some 4G stuff), which is generating about 20 billion a year of revenue. Net bottom line more than pays for the money to borrow this stuff.
They get a customer base, they get ready income, and they get more coverage up front - and best of all, enough income to pay for the take over.
They can still spend the 3.8 billion over time to improve their existing network, but now they are doing it for a much larger customer base (cost per user drops significantly).
Mike, where is your MBA from again?
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None of this has _anything_ to do with whats good business, and it has everything to do with what we're going to let the market do and why.
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You get what you pay for.
Increasing the size of your network, and customer base, and eliminating a competitor: $38 billion.
Having a monopoly: priceless.
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It really seems like AT&T is trying to pay to buy out competition, and this document proves that their previous purchase justifications were less than honest. You have to agree that it has at least a little bit of stinky smell to it, no?
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I don't think for a second that the government would permit anything near a monopoly in this game.
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What's That Sound?
The deafening sounds of crickets and no one being surprised.
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Re: where is that letter?
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Really...
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In fact the cell phone market might be on its way to looking like the video game console market (a very small handful of competitors).
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Re: Really...
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