AT&T Accidentally Reveals That It Doesn't Need T-Mobile At All

from the oops dept

Fri, Aug 12th 2011 3:57pm — Mike Masnick

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.

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Filed Under: costs, merger, spectrum
Companies: at&t, t-mobile

22 Comments

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Jeffrey Nonken (profile), 12 Aug 2011 @ 4:50pm

Oops
Hey, AT&T -- that cool, breezy feeling around your genitals? That means your fly is unzipped and something is hanging out that you didn't want to be.
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First, 12 Aug 2011 @ 4:50pm

Trolls Mcgee
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Anonymous Coward, 12 Aug 2011 @ 5:43pm

I always assumed they were just removing competition. T-Mobile has happy customers and AT&T wants them, though not necessarily bringing the adjective along with them.
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anonymous disenfranchised Dutch coward, 12 Aug 2011 @ 5:50pm

where is that letter?
The link doesn't show the AT&T document! I doubt if it matters for the outcome though.
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jakerome (profile), 12 Aug 2011 @ 6:12pm

This is too bad, because now that AT&T has admitted what everyone already knew, the FCC commissioners will feel bad when they approve the merger anyways.

Shame on us.
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rubberpants, 12 Aug 2011 @ 7:00pm

This is good news
Exposing the truth is always a good thing. Unfortunately, when it comes to lobbying and regulation the truth doesn't seem to be a primary consideration. I'm still hopeful though.
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Makoto (profile), 12 Aug 2011 @ 7:31pm

I hope that this at least puts the merger deal on hold, if it doesn't kill it entirely.
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Anonymous Coward, 12 Aug 2011 @ 8:51pm

Well, the "truth" isn't always exactly the truth.

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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Anonymous Coward, 13 Aug 2011 @ 12:03am

Re:
Whats your point? Nobody wants AT&T to merge and reduce competeition, but AT&T pretends like they have to do it or else theyre crippled and nothing will ever get better. If that were true it might mitigate our distaste for the competition reduction. If it isn't true, then we all laugh and say suck it up, you can take it.

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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Jeff Seale (profile), 13 Aug 2011 @ 5:48am

Re:
and maybe they'll stop mentioning that in their commercials. Good on you guys, doing that before the merger even got the OK from the FCC. Somebody in AT&T's marketing department must've had too much to drink. Geez!!
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DannyB (profile), 13 Aug 2011 @ 8:35am

You get what you pay for.
Building out your network to catch up to Verizon: $3.8 billion.

Increasing the size of your network, and customer base, and eliminating a competitor: $38 billion.

Having a monopoly: priceless.
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Jim O (profile), 13 Aug 2011 @ 12:11pm

Re:
AT&T is paying to remove a tertiary player (Tmobile) from the wireless market. Further, they are paying to block Sprint from acquiring T-mobile (thereby effectively knocking two players out of major contention).

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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Anonymous Coward, 13 Aug 2011 @ 12:14pm

Re: Re:
Stinky, maybe - except that there is great potential if they aren't using the t-mobile network frequencies, there could always be a reversion and a resale.

I don't think for a second that the government would permit anything near a monopoly in this game.
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A Guy, 13 Aug 2011 @ 3:01pm

What's That Sound?
OHHHH

The deafening sounds of crickets and no one being surprised.
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Anonymous Coward, 14 Aug 2011 @ 5:42am

Re:
They won't GET the customer base. I've been a happy T-Mobile customer since the company was Soundstream (11+ years). If the deal goes through, I am gone -- 100% guaranteed. It'll be "hello Sprint". In the meantime, the spectre of this competition-eliminating spectrum grab has kept me from getting new phones on T-Mobile and more services, though I currently have 5 phones with them on a family plan (no contract). They are the only company with many of the services they offer and have excellent customer service with second-in-the-US coverage.
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Spaceboy (profile), 14 Aug 2011 @ 7:55am

Re: where is that letter?
I haven't been able to find the leaked document anywhere.
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The eejit (profile), 14 Aug 2011 @ 10:40am

Re: Re: Re:
Never underestimate $$$-induced stupidity.
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Thomas (profile), 14 Aug 2011 @ 10:49am

Really...
what they want is to take over T-Mobile then slowly kill it and absorb T-Mobile customers into the death star. To quote "Resistance is futile.." They also don't talk about the tens of thousands of T-Mobile workers who will be uneployed once AT&T takes over.
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Danny, 14 Aug 2011 @ 11:22am

Re: Re:
But more than likely people like you (who will jump ship) are in the minority. In fact I'll bet AT&T has already accounted for folks like you as "acceptable losses". In other words AT&T has no problem with a couple thousand people leaving after the merger because in exchange they are eliminating a competitor. And that's the important part. Not the infrastructure. Not the technology. And damn sure not the customers.

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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Anonymous Coward, 15 Aug 2011 @ 8:07am

Re: Really...
I think it may be illegal to reference both star wars and star trek in a single post..
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Anonymous Coward, 15 Aug 2011 @ 8:25am

I have Tmobile now. I aint stayin when they AT&T
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Anonymous Coward, 31 Aug 2011 @ 8:04pm

Re: Re: where is that letter?
http://www.dslreports.com/r0/download/1678331~018ee90413e657e412818181a5d840ff/DOC.pdf
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