Sprint Seemingly Shocked That Nobody Wants Them to Kill Off Price-Disruptive and Competitive T-Mobile

from the your-surprise-is-somewhat-surprising dept

Fri, Feb 14th 2014 8:32am — Karl Bode

Roughly two years ago, when fighting AT&T's ham-fisted acquisition attempt of T-Mobile, Sprint lobbyists and lawyers were busy telling anybody who would listen that the United States wireless industry isn't truly competitive unless you've got four distinct companies competing. That's something that United States regulators have generally agreed upon, especially given the massive size and power of AT&T and Verizon Wireless, and their domination of both the retail and special access markets. Fast forward two years after the FCC and DOJ blocked AT&T's attempted acquisition, and those opinions appear to have been justified by T-Mobile's sudden resurgence.

The company has not only become great entertainment via snarky CEO Tweets and amusingly mocking carriers like AT&T at every opportunity, but their price disruption has been a truly welcome thorn in the side of larger carriers. From T-Mobile's free international roaming data offer to their war on long-term contracts, the company is leeching customers from AT&T in real price competition, a rarity for United States telecom markets.

Enter Sprint, who now owned by acquisition-hungry Japanese carrier Softbank, is eager to obliterate all of this progress with a T-Mobile acquisition of their own. Regulators have made it clear for years they want four competitors, and every meeting Sprint and SoftBank have had so far has resulted in regulators clearly expressing doubt at the consumer benefits of such a deal. Consumers too have made it clear they loathe the idea as well, given that Sprint has fallen to last place in customer satisfaction rankings and last place in most LTE network speed and latency tests. As such, it's rather curious to see Sprint and SoftBank executives "surprised" this week by the cold shoulder they continue to get from regulators (Wall Street Journal, reg. required):

Sprint Chairman Masayoshi Son and Chief Executive Dan Hesse, who met with officials at the Justice Department and the Federal Communications Commission in Washington in recent weeks, always knew a deal would be a tough sell, the people said. But the men were surprised by the level of opposition and its very public nature, one of the people said.

They really shouldn't be. Trying to acquire the wireless industry's sweetheart just as they're gaining headlines for being disruptive? Two years after arguing about the sanctity of maintaining four competitors? Sprint has argued that combining with T-Mobile will make a stronger third competitor to AT&T and Verizon Wireless, though telecom consolidation often doesn't work that way, and Sprint has shown little to no ability to mirror T-Mobile's price aggression and consumer-friendly policies (like cell unlocking) in recent years. Though not without problems of its own, the FCC and DOJ will also likely prefer T-Mobile get acquired by someone like Dish in order to retain four distinct competitors. It seems like Sprint might want to save everybody involved a lot of time and money, and for the moment focus on learning to properly run the network they already own.

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Filed Under: competition, doj, fcc
Companies: at&t, spring, t-mobile, verizon

17 Comments

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Ninja (profile), 14 Feb 2014 @ 7:19am

Sprint ahead by acquiring better competitors and making them a crap. Classic move!
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Anonymous Coward, 14 Feb 2014 @ 8:57am

you know, the Irony is, that your oh so disruptive T-mobile does the same monopolistic behavior as AT&T and verizon in germany, their very home market.
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PRMan, 14 Feb 2014 @ 9:01am

Unlocking?
Where else would you even use a CDMA phone whose radio only talks to Sprint networks?

These aren't SIM card phones, you know... (You DID know that Sprint phones don't have SIMs, right?)
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Adam J, 14 Feb 2014 @ 10:22am

Re: Unlocking?
All lte sprint phones have sims.
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Anonymous Coward, 14 Feb 2014 @ 10:25am

Response to: Anonymous Coward on Feb 14th, 2014 @ 8:57am
Doesn't change what they are to the us though
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Anonymous Coward, 14 Feb 2014 @ 10:56am

and the specific reason for having 4 competitors is, exactly, what? look at the size of the USA for goodness sake! no wonder the prices for anything telephone, cable, tv, mobile, internet related is a complete and utter fucking ripoff! and no wonder the '4' dont want more companies in the field, throwing more competition into the ring! it's much, much easier to have 4 heads agree on something, particularly when it is producing a MONOPOLY!
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Anonymous Coward, 14 Feb 2014 @ 11:13am

Re: Unlocking?
Yes, I learned this to my consternation when looking around for less expensive alternatives to Sprint. Only a couple of the newcomers to the business (say Ting, for example) use the Sprint network, but darn near everyone else is GSM all the way. Do not know if either of the two (CDMA vs. GSM is so much better that it is the best way to go), but I do know that flexibility in choice of service providers counsels in favor of GSM and its SIM cards.
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DH's Love Child (profile), 14 Feb 2014 @ 12:14pm

Re: Re: Unlocking?
Actually Verizon is primarily CDMA infrastructure for 2.5G and 3G and LTE for 4G. ATT and T-Mo are GSM.
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John Fenderson (profile), 14 Feb 2014 @ 12:52pm

Re:
"and the specific reason for having 4 competitors is, exactly, what?"

To make sure it remains an oligopoly. That may not be as good as a monopoly, but it's a hell of a lot better than something approaching a free market.
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Namel3ss (profile), 14 Feb 2014 @ 1:25pm

Switching to T-Mobile was the best move I could have made. Cheaper, and the free roaming saved me God knows how much on a recent trip to Europe.

The only downside is their coverage, but hopefully that'll be improving the more customers they lure away from ATT.

I still say ATT can suck it.
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Karl Bode (profile), 14 Feb 2014 @ 4:28pm

Re:
They too always seem to be promising network advancements that are "just around the corner." See Sprint Spark. Company needs to focus on running a network properly before they bite off more than they can chew.
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Karl Bode (profile), 14 Feb 2014 @ 4:29pm

Re: Response to: Anonymous Coward on Feb 14th, 2014 @ 8:57am
For now. And only because they have no other choice. I'm not entirely sure John Legere's behavior isn't largely theatrical.
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Karl Bode (profile), 14 Feb 2014 @ 4:30pm

Re: Re:
That's it. It's at least better than AT&T and Verizon dictating the beat.
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Karl Bode (profile), 14 Feb 2014 @ 4:31pm

Re:
I've come close several times now, but ever here in the NYC area their coverage still doesn't quite compare to that of Verizon, who I still lose signal on while traveling on major NY highways. Waiting to see how T-Mobile's LTE expansion plans go before jumping ship.
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R.H. (profile), 15 Feb 2014 @ 8:41am

Re: Re: Unlocking?
This is only partially true. For example, the Sprint Galaxy Nexus has a SIM for its LTE service but, that SIM is inside of the phone behind 'warranty void if opened' screws. They call it an internal SIM. That's part of the reason that no CDMA providers got the Nexus 4. Google had to wait until someone made a cheap single chipset radio that worked for all American cellular frequencies like the one in the Nexus 5.
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R.H. (profile), 15 Feb 2014 @ 8:44am

Re:
I really want to switch from Sprint to T-Mobile. Even with a business discount, I'd get a lower price on T-Mobile for unlimited data (which is more important to me than voice minutes). However, the last time someone with T-Mobile service visited my apartment they were stuck on 2G. I can't live with that. They need to have better coverage before I jump in.
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Kalvan (profile), 16 Feb 2014 @ 8:44am

Re: Re
It all depends on where you are. T-Mobile's CEO says they cover the vast majority of Americans, though not the vast majority of the geography. He says they're working on covering the geography. We'll see.

However, in the Dallas area, T-Mobile was a vast improvement over Sprint. Better coverage, better bandwidth.

On a recent trip from Dallas to Austin, T-Mobile was no worse in the boonies than Sprint. (Damning with faint praise.)

I paid over $500 to be shut of Sprint and move to T-Mobile. It will pay for itself in 5 months. And, for me where I am, the service is much better.
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