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AT&T defends T-Mobile deal as boosting iPhone service, competition

post #1 of 37
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Chief executive Randall Stephenson defended AT&T's intent to buy T-Mobile, saying it would boost call quality, reduce overseas roaming fees, and maintain "intense" competition.

Merging T-Mobile's underutilized allocation of public spectrum into AT&T's network would improve capacity in some large US cities by around 30 percent Stephenson told attendees at a Council on Foreign Relations event, according to a report by Bloomberg.

"This transaction is very instrumental," Stephenson said. "Virtually on the day you close the deal, getting a 30 percent lift in capacity in New York City: thats a significant improvement in call quality and data throughput.

Competitors, in particular Sprint, have joined some consumer groups in calling for close scrutiny of the deal, warning that it would reduce the number of major US carriers and reduce options for low cost mobile service.

Stephenson argued that such claims were unfounded however. "This is an intensely competitive industry, he said. It is intense before we do this transaction, it will be intense after we do this transaction.

Prior to the release of Apple's iPhone, America's four top carriers maintained silos of competition segregated by different cellular technologies operating on different frequencies, and locked customers into long term contracts with simple phones that were cheap to subsidize, erasing competition in hardware. They subsequently marketed expensive $2 to $3 ringtones and rented software applets such as simple games for several dollars a month.

The allure of the iPhone shattered the business model behind overpriced software and ringtones, allowing AT&T to rival Verizon despite having a newer network with less coverage in many areas. After getting the iPhone, Verizon forced AT&T to lower and expand its tethering options.

US carriers face significant problems in finding enough available spectrum to build out next generation mobile networks nationwide. AT&T has proposed merging its core network with T-Mobile and repurposing the company's acquired AWS bands for use in building out suburban and rural LTE service in the future.

While reducing the number of nationwide companies offering mobile service, the deal would better utilize the country's radio spectrum, which belongs to the public and is licensed to companies to use. The acceleration of AT&T's service improvements and LTE buildout would foster additional competition with Verizon, which has already started implementing its own LTE data network.
post #2 of 37
And why would anybody believe anything that the CEO of AT&T has to say about anything?
post #3 of 37
I have a very simple suggestion for the regulators:
Allow the merger of the networks on a technical level but force T-Mobile to keep operating as a mobile virtual network operator and giving it (and other mobile virtual network operators) all the access they need to the network.
post #4 of 37
Quote:
Originally Posted by AppleInsider View Post

"This transaction is very instrumental," Stephenson said. "Virtually on the day you close the deal, getting a 30 percent lift in capacity in New York City: thats a significant improvement in call quality and data throughput.

I would like him to define what he means by "virtual". Considering T-Mobile and AT&T operate 3G at different frequencies, it would be difficult to somehow merge them "on the day [they] close the deal."

More over, I would like AT&T to define what sort of plans we can expect around the time day close the deal. For instance, T-Mobile offers more minutes than AT&T on most plans and unlimited messaging plans are $10 cheaper.
post #5 of 37
Quote:
Originally Posted by noirdesir View Post

I have a very simple suggestion for the regulators:
Allow the merger of the networks on a technical level but force T-Mobile to keep operating as a mobile virtual network operator and giving it (and other mobile virtual network operators) all the access they need to the network.

And keep my current T-Mobile $19.99/mo unlimited sms, unlimited data w/ tethering plan intact.
post #6 of 37
Quote:
Originally Posted by AppleInsider View Post

Chief executive Randall Stephenson defended AT&T's intent to buy T-Mobile, saying it would boost call quality, reduce overseas roaming fees, and maintain "intense" competition.

can't imagine it's all that difficult to reduce overseas roaming fees. just back in california from yet another trip to london. love it that every time i land in london and turn on my at&t-monopoly-locked phone i get the message from at&t that domestic plans don't apply, that voice is $1.39 a minute and data is $19.97 per megabyte. $19.97 per megabyte? are you mad?

i have a jailbroken 3GS into which i pop a t-mobile SIM and get cheap calls and 5 days of unlimited 3G data. the data costs £2.50. which ends up being just over $4. so, this trip, i paid $4 for unlimited data ... i used about 220MB. using the same amount of data roaming with at&t would have cost me about $4,393.40 + tax. only slightly more expensive.

(this is exactly the reason i jailbroke my phone, and one of the many reasons i loathe at&t.)

i do not believe the merger is in the interest of the consumer or in the interest of the market. the fcc has the ability to stop the merger. but they won't.
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post #7 of 37
Quote:
Originally Posted by filburt View Post

I would like him to define what he means by "virtual". Considering T-Mobile and AT&T operate 3G at different frequencies, it would be difficult to somehow merge them "on the day [they] close the deal."

Only 3G is different, standard GSM and EDGE uses the same frequencies. Any calls dropped right now could be routed over T-Mobiles GSM and EDGE networks without any problems.
Additionally, there are likely to be some phones on AT&T's network (particularly at a future moment when the deal actually closes) that also support T-Mobiles 3G frequencies.
post #8 of 37
Quote:
Originally Posted by OriginalMacRat View Post

And keep my current T-Mobile $19.99/mo unlimited sms, unlimited data w/ tethering plan intact.

Requiring the new T-Mobile to grandfather all their customers in their existing plans.
post #9 of 37
Quote:
Originally Posted by Pooch View Post

(this is exactly the reason i jailbroke my phone, and one of the many reasons i loathe at&t.)

This is why it is great to buy an iPhone directly from Apple in Hong Kong, UK and other countries.

The phones are sold factory unlocked and still fully supported by Apple.
post #10 of 37
This guys is a big fucking liar! Remember he once tried to sue a customer who emailed him twice about iPhone tethering? That guy is now on Sprint EVO 4G. He has no respect for the consumer. He's arrogant and he only has his own interest at heart. You believe whatever he says at your own peril.
post #11 of 37
One of the things that bothers me about Randall Stephenson's statement is his assertion that acquiring T-Mobile's spectrum improves service for existing AT&T customers, but there are T-Mobile customers currently using that spectrum. For 3G, they are separate signals but for voice and EDGE data they are essentially the same (which is why an unlocked iPhone works on T-Mobile with EDGE) so for their voice network while they are adding bandwidth, they are also adding the customers that are coming over from T-Mobile. My question is will this result in fewer dropped calls for AT&T customers or more dropped calls for T-Mobile customers? How much of AT&T's problems are due to insufficient towers from a geographic standpoint and how much is handling the load of data going onto their network (because voice is transmitted as data). Maybe it means service in SF, LA, NY and other problem areas improves, but it could decline for AT&T customers in weak T-Mobile areas, or T-Mobile service could weaken in weak AT&T areas because even the combined hardware they have may be insufficient for handling the load of both networks.
post #12 of 37
Quote:
Originally Posted by AppleInsider View Post

"This transaction is very instrumental," Stephenson said. "Virtually on the day you close the deal, getting a 30 percent lift in capacity in New York City: thats a significant improvement in call quality and data throughput.

Check me if I'm wrong, but won't they be getting an increased load also?
post #13 of 37
Quote:
Originally Posted by OriginalMacRat View Post

And keep my current T-Mobile $19.99/mo unlimited sms, unlimited data w/ tethering plan intact.

Not gonna happen kido. ATT is greedy.
post #14 of 37
Quote:
Originally Posted by quinney View Post

Check me if I'm wrong, but won't they be getting an increased load also?

Yes, but T-Mobile's network has spare capacity whereas AT&T's one does not (at least in some key markets).
post #15 of 37
They better hope that T-Mobile's "spare capacity" is enough to compensate for AT&T's overload, otherwise they'll make things worse for T-Mobile customers.
post #16 of 37
That is this is likely the only way that AT&T can quickly address coverage issues in some locations. Preexisting towers can be quickly updated to support AAT&T customers without all the local governments getting involved.

Speaking of which we currently have a local government screwing up cell service here. In this case they are jerking Verizon around but in the end all it really means in higher cell phone costs and lower service quality. I'm surprised that more users don't get on their local reps to stop this ignorant behavior.

Frankly if you are a AT&T user you will likely gain by this merger. It should result in better coverage with in a very short time.
post #17 of 37
Quote:
Originally Posted by Pooch View Post

can't imagine it's all that difficult to reduce overseas roaming fees.

Sure. Stop this crap of having locked phones so when you are overseas etc you can't swap sims and use local service.

That will lower your roaming fees a whole lot.

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post #18 of 37
Quote:
Originally Posted by noirdesir View Post

I have a very simple suggestion for the regulators:
Allow the merger of the networks on a technical level but force T-Mobile to keep operating as a mobile virtual network operator and giving it (and other mobile virtual network operators) all the access they need to the network.

I like this idea, I doubt it'll happen, but here's hoping.

I don't believe for a second that reducing the number of networks will in any way enhance competition in a way that benefits consumers, it'll just stop AT&T from getting its butt kicked by Verizon now that the iPhone is no longer exclusive.

However, I am hopeful that some sort of a merger happens, because I've had T-Mobile and I now have AT&T and I'm pretty sure the only way for either of them to have a decent network is for them to merge. So its like 2 crappy networks become one (hopefully) good one. Is that worth the hit to competition? Time will tell.

I always thought that they shared towers anyway, but maybe that was just for edge and not 3G.
post #19 of 37
Quote:
Originally Posted by noirdesir View Post

Requiring the new T-Mobile to grandfather all their customers in their existing plans.


They likely will. Until you buy a new phone. Then you are signing a new contract so they can change the terms.

Although maybe to be nice they will let you keep your current prices for one extra go around but don't count on it.

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post #20 of 37
Quote:
Originally Posted by Pooch View Post

can't imagine it's all that difficult to reduce overseas roaming fees. just back in california from yet another trip to london. love it that every time i land in london and turn on my at&t-monopoly-locked phone i get the message from at&t that domestic plans don't apply, that voice is $1.39 a minute and data is $19.97 per megabyte. $19.97 per megabyte? are you mad?

i have a jailbroken 3GS into which i pop a t-mobile SIM and get cheap calls and 5 days of unlimited 3G data. the data costs £2.50. which ends up being just over $4. so, this trip, i paid $4 for unlimited data ... i used about 220MB. using the same amount of data roaming with at&t would have cost me about $4,393.40 + tax. only slightly more expensive.

(this is exactly the reason i jailbroke my phone, and one of the many reasons i loathe at&t.)

i do not believe the merger is in the interest of the consumer or in the interest of the market. the fcc has the ability to stop the merger. but they won't.

Yeah, I couldn't believe my ears at ATT, when I asked them about an upcoming trip to Germany, Switzerland, and Italy. I have an iPhone 4, and an iPad2. I would like to use the iPhone 4 as a hotspot on the upcoming vacation. Has anyone had any experience with jailbreaking an iPhone 4 (with 4.3.1 iOs) so you can use your phone as a hotspot and connect your iPad to it? Can you get such a sim card that allows you to hotspot connect and pay for data usage (as well as make calls on a per-minute basis I assume), and only have to worry about one sim card for both the devices? Did you jailbreak your phone while in UK, and use their card, or before you left the states? Will the t-mobile sim card work OK in the ipad?

I would sure like to be able to use one SIM card only while there, and take advantage of the hotspot, not having to also jailbreak my ipad to allow wireless tethering, but cannot find any definitive info, since the hotspot for the iphone 4 was just implemented. (or do folks use MyWi while overseas?

Any help would be most appreciated.
post #21 of 37
Quote:
Originally Posted by AppleInsider View Post

Stephenson argued that such claims were unfounded however. "This is an intensely competitive industry,” he said. “It is intense before we do this transaction, it will be intense after we do this transaction.”

Yeah, right. You're like saying your mom is a man, and yeah, we believe it.
post #22 of 37
What he really meant to say was "I am going to make so much money off of this deal that no one in my family will have work for the next 500 years.
post #23 of 37
Someone posted on Ars about this a couple of days ago. Saying that one priority of the FCC is to make sure the limited wireless spectrum is used efficiently. That AT&T does have a good argument in that T-Mobile is holding valuable spectrum that is being underutilized because of its dwindling user base.

With AT&T and Verizon's phenomenal wireless web growth, the FCC wants to have that wireless spectrum being used.
post #24 of 37
You want the government to force a healthy growing company to keep a dying company alive. Where is the free market system in that?

Quote:
Originally Posted by noirdesir View Post

I have a very simple suggestion for the regulators:
Allow the merger of the networks on a technical level but force T-Mobile to keep operating as a mobile virtual network operator and giving it (and other mobile virtual network operators) all the access they need to the network.
post #25 of 37
AT&T will already grandfather in current T-Mobile contracts.

Quote:
Originally Posted by noirdesir View Post

Requiring the new T-Mobile to grandfather all their customers in their existing plans.
post #26 of 37
Quote:
Originally Posted by filburt View Post

I would like him to define what he means by "virtual". Considering T-Mobile and AT&T operate 3G at different frequencies, it would be difficult to somehow merge them "on the day [they] close the deal."

If you read their merger plan they do explain what they will do with T-Mobile's spectrum.

Quote:
More over, I would like AT&T to define what sort of plans we can expect around the time day close the deal. For instance, T-Mobile offers more minutes than AT&T on most plans and unlimited messaging plans are $10 cheaper.

AT&T will have to honor current T-Mobile contracts and customer plans. Its likely AT&T will offer deals to T-Mobile users to convince them to leave their T-Mobile plan and switch to AT&T.
post #27 of 37
Quote:
Originally Posted by TenoBell View Post

If you read their merger plan they do explain what they will do with T-Mobile's spectrum.



AT&T will have to honor current T-Mobile contracts and customer plans. Its likely AT&T will offer deals to T-Mobile users to convince them to leave their T-Mobile plan and switch to AT&T.

They will honor it until the contract expires and then you have a choice: Stay with ONLY GSM provider for higher price or switch to competition (Verizon) for the same higher price. DUOPOL in practice.
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post #28 of 37
Translation: Our network is shit, as anyone who's every used it well knows. We haven't done jack in the last 3.5 years to do stave the onslaught of iPhone users. When Verizon has LTE rolled out in a couple years, we are going to get our asses handed to us. So please let us buy out a network with half the subscribers but better coverage and service.
post #29 of 37
AT&T will not be able to force anyone to give up their T-Mobile service. They will want those customers to voluntarily become AT&T customers and will offer them incentives to do so.

If T-Mobiles prices were such a great deal then T-Mobile would not be loosing hundreds of thousands of customers per quarter running them out of business. AT&T and Verizon can only charge what people believe is the value of their service.

Quote:
Originally Posted by gabberattack View Post

They will honor it until the contract expires and then you have a choice: Stay with ONLY GSM provider for higher price or switch to competition (Verizon) for the same higher price. DUOPOL in practice.
post #30 of 37
How does AT&T keeps adding millions of subscribers to their shitty network? You really believe AT&T has done nothing to upgrade its network in three and half years?

Verizon has to roll out LTE fast because its 3G network has no where else to go.

AT&T is not forced to roll out LTE as fast because its 3G network has the potential to be as fast as Verizon's current LTE rollout.

Quote:
Originally Posted by shadash View Post

Translation: Our network is shit, as anyone who's every used it well knows. We haven't done jack in the last 3.5 years to do stave the onslaught of iPhone users. When Verizon has LTE rolled out in a couple years, we are going to get our asses handed to us. So please let us buy out a network with half the subscribers but better coverage and service.
post #31 of 37
Thank God I work for the government and live in Europe (Finland) where the operators are not as crappy as AT&T and where they actually encourage subscribers to use data services.
post #32 of 37
If AT&T only had to cover an area roughly the size of Nevada, I'm sure it would be easier to encourage subscribers to use as much data as they'd like.


Quote:
Originally Posted by sapporobabyrtrns View Post

Thank God I work for the government and live in Europe (Finland) where the operators are not as crappy as AT&T and where they actually encourage subscribers to use data services.
post #33 of 37
Quote:
Originally Posted by TenoBell View Post

If AT&T only had to cover an area roughly the size of Nevada, I'm sure it would be easier to encourage subscribers to use as much data as they'd like.

You have heard of the concept: Economies of scale. Size is not the issue as the network size is proportional to the subscriber base. The operators here actually invest in the networks and know how to manage them. If you want, we can use Sweden, or Germany, or head south to the Mid East. The results are still the same.
post #34 of 37
Economies of scale work when you can take the same methodology and increase it in a linear fashion. AT&T cannot simply take way is done in Finland and use that to cover the entire United States.

Sweden, Germany, or the Middle East still don't have the challenges that AT&T face.

Give me an example of one company that has built its infrastructure over 3 million square miles with flawless coverage and unlimited data usage.

Quote:
Originally Posted by sapporobabyrtrns View Post

You have heard of the concept: Economies of scale. Size is not the issue as the network size is proportional to the subscriber base. The operators here actually invest in the networks and know how to manage them. If you want, we can use Sweden, or Germany, or head south to the Mid East. The results are still the same.
post #35 of 37
Okay then. Here is what I want to see mandated to AT&T to allow this merger forward.

All usage of the wireless spectrum will be treated as simple data and shall be charged out at the lowest per MB cost of such data.

For instance, AT&T charges $0.01 per MB for their 2GB plan with internet data.

Making the ridiculously high assumption that each text message consumes 1 KB then AT&T is charging around $10 per MB for texting.

Using Cisco's "Voice Over IP - Per Call Bandwidth Consumption" page at http://www.cisco.com/en/US/tech/tk65...80094ae2.shtml I will assume their worst case scenario rounded up and say that a voice call over AT&T's network consumes 90 kbps. This works out to .675 MB per minute. Using their 900 minute plan then this works out to 607.5 MB for $60 or $10.13 per MB.

So, here is the new price structure that should be mandated to AT&T using their own profitable $0.01 per MB pricing structure.

900 minutes of phone calls should cost $6.08
1000 text messages should cost $0.01
And data should be priced at:
$2 for 200 MB
$20 for 2 GB
$40 for 4 GB
and a penny for each MB that you go over on any plan.

Oh, and they will no longer be able to charge for tethering as it doesn't matter what device is used to consume the data as their network doesn't know the difference.

If AT&T will not meet these reasonable demands then the merger should not be allowed.

Now this would spur competition.
post #36 of 37
The government has not authority to make AT&T's price plans. Its not the government's job to proactively enforce the details of how competition happens. Its only the governments job to prevent companies from colluding and conspiring to stifle competition.

Quote:
Originally Posted by mknopp View Post

Okay then. Here is what I want to see mandated to AT&T to allow this merger forward.

All usage of the wireless spectrum will be treated as simple data and shall be charged out at the lowest per MB cost of such data.

For instance, AT&T charges $0.01 per MB for their 2GB plan with internet data.

Making the ridiculously high assumption that each text message consumes 1 KB then AT&T is charging around $10 per MB for texting.

Now this would spur competition.
post #37 of 37
Quote:
Originally Posted by TenoBell View Post

You really believe AT&T has done nothing to upgrade its network in three and half years?

As I said, not enough to keep up with the demand the iPhone placed on their network. Charging customers $100 a month for service they couldn't deliver is garbage in my book.

Quote:
Originally Posted by TenoBell View Post

Verizon has to roll out LTE fast because its 3G network has no where else to go.

AT&T is not forced to roll out LTE as fast because its 3G network has the potential to be as fast as Verizon's current LTE rollout.

http://www.wired.com/gadgetlab/2011/03/4g-network-test/

Enjoy your HSPA+ on AT&T. If AT&T dicks around with 4G as much as they did with 3G, I wouldn't hold my breath for LTE.
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