or Connect
AppleInsider › Forums › Mobile › iPhone › AT&T, T-Mobile file plans to transfer $1 billion wireless airwaves
New Posts  All Forums:Forum Nav:

AT&T, T-Mobile file plans to transfer $1 billion wireless airwaves

post #1 of 25
Thread Starter 
AT&T has filed for FCC approval to transfer wireless spectrum worth $1 billion to T-Mobile as a result of the failure of its $39 billion effort to acquire the smaller mobile carrier.

Along with the spectrum, AT&T will give T-Mobile's German owner Deutsche Telekom $3 billion in cash as part of its pre-negotiated terms for backing out of the acquisition, which was quashed by the US Justice Department and the FCC as threatening competition in the wireless market.

According to a report by the Wall Street Journal, Tom Sugrue, T-Mobile’s senior vice president for government affairs said "this additional spectrum will help meet the growing demand for wireless broadband services."

T-Mobile is the only carrier among the US' top 4 to have not articulated any plans for rolling out LTE 4G service, and is also hampered by its use of non-standard UMTS 3G service. That prevents the carrier from selling Apple's existing iPhone, which it has cited as a key reason for its poor performance.

T-Mobile has previously indicated that new chipsets could enable future iPhone models to support the company's existing 3G service. Without building out LTE however, T-Mobile could likely be left behind as support for the new networking standard begins to trickle into the mainstream.

Both T-Mobile and AT&T have referred to their existing HSPA+ networks as 4G, because they can offer data speeds compatible to LTE. However, LTE has future potential well beyond HSPA+.




Apple is expected to release an iPhone model capable of supporting LTE later this year. It has not previously supported LTE until now because of technical issues involving battery life and size.

Last April, Apple's chief executive Tim Cook explained in a conference call, "the first generation of LTE chipsets force a lot of design compromises with the handset, and some of those we are just not willing to make."
post #2 of 25
Comparable, not compatible to LTE Speeds
post #3 of 25
And yet AT&T claims the initial justification for purchase of T-Mobile was AT&T's shortage of spectrum space
post #4 of 25
Quote:
Originally Posted by SailorPaul View Post

And yet AT&T claims the initial justification for purchase of T-Mobile was AT&T's shortage of spectrum space

All spectrum space is not created equal.

Tmoblie had ZERO spectrum to make the jump to LTE, meaning they were absolutely dead in the water. The spectrum space you are referring to is (IIRC) 3g and below spectrum in densely populated areas like Phily and San Fran and NY.
post #5 of 25
How is being blocked by the government considered "backing out of the deal?" Not that I have any sympathy for AT&T, but I'm just wondering how this is their fault.
post #6 of 25
Wow. Talk about an M&A screw-up of humongous proportions.

This will be taught in b-schools. Not as a shining example.
post #7 of 25
I thought the deal was for a $1 billion value with spectrum being a part of that value, not the complete value.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply
post #8 of 25
Quote:
Originally Posted by Jcoz View Post

All spectrum space is not created equal.

Tmoblie had ZERO spectrum to make the jump to LTE, meaning they were absolutely dead in the water. The spectrum space you are referring to is (IIRC) 3g and below spectrum in densely populated areas like Phily and San Fran and NY.


LTE itself is just one flavor of 4G. T-Mobile's current spectrum satisfied the definition of 4G, hence it marketing itself as the first 4G Network. LTE was competing with other 4G technologies, such as wi-max (initially a part of Sprint's plans).

It seems the industry is deciding LTE is the way to go, and T-Mobile will gravitate toward that. It's 4G network is probably faster than everybody but Verizon's (except perhaps where AT&T has rolled out newer LTE networks). Here is some slightly dated statistics.

Currently, I pay T-Mobile $80 dollars a month for a family plan that would cost me $145 on AT&T and probably a similar amount on Verizon.
post #9 of 25
Quote:
Originally Posted by anantksundaram View Post

Wow. Talk about an M&A screw-up of humongous proportions.

This will be taught in b-schools. Not as a shining example.

In life if you want to win big, you have to be willing to take big chances. This cost AT&T very little, and it had a high chance of success. What it paid out is deductible as a business right off. Essentially the tax payer is paying for the failed deal. That is probably OK though, as the tax payer would have even paid more if T-Mobile folded.
post #10 of 25
Quote:
Originally Posted by TBell View Post

In life if you want to win big, you have to be willing to take big chances.

Yeah, but there's a difference between 'big' chances and stupid.
post #11 of 25
Quote:
Originally Posted by zorinlynx View Post

How is being blocked by the government considered "backing out of the deal?" Not that I have any sympathy for AT&T, but I'm just wondering how this is their fault.

AT&T proposed to acquire T-Mobile. The proposal was risky for T-Mobile because if the deal didn't go through, T-Mobile might have been irrevocably damaged by 1) customers fleeing thinking the company wouldn't be around, and 2) not being able to land needed deals for phones like the iPhone with the uncertainty of the deal floating around. To agree to the deal, T-Mobile required AT&T to promise to pay a 4 billion dollar penalty if AT&T couldn't close the deal. The penalty had nothing to do with fault, but was T-Mobile's price to cover any harm done to T-Mobile as a result of AT&T's failed attempt to get the government to approve the deal.

It had to do with T-Mobile agreeing to go along with AT&T's risky proposal, which AT&T incorrectly thought it could get regulators to agree to. It thought that because it gives a lot of money to pay for politicians votes.

AT&T did back out of the deal because it choose not to push the fight to the end. Nonetheless, it would have had to pay even if it didn't back out if the government ultimately won in the fight.
post #12 of 25
Quote:
Originally Posted by anantksundaram View Post

Yeah, but there's a difference between 'big' chances and stupid.

Although greedy, it wasn't stupid. Just about every pundit thought AT&T had the deal in the bag. It contributes more money to your elected officials than any other US company. Hence a majority of elected officials coming out in favor of the deal. Like in the past, it likely made the same promises to regulators of high paying jobs after they leave their government positions if the deal passed. That generally is a proven formula for success.

Maybe a calculated gamble, but not stupid. Especially considering whatever it gives to T-Mobile is tax deductible. So the actual cost is lower.
post #13 of 25
Quote:
That prevents the carrier from selling Apple's existing iPhone, which it has cited as a key reason for its poor performance.

But they sell android devices, right? Why are they performing poorly?
/s
post #14 of 25
Well it's nice to see my money going to help somebody's network.
2011 13" 2.3 MBP, 2006 15" 2.16 MBP, iPhone 4, iPod Shuffle, AEBS, AppleTV2 with XBMC.
Reply
2011 13" 2.3 MBP, 2006 15" 2.16 MBP, iPhone 4, iPod Shuffle, AEBS, AppleTV2 with XBMC.
Reply
post #15 of 25
Quote:
Originally Posted by anantksundaram View Post

Wow. Talk about an M&A screw-up of humongous proportions.

This will be taught in b-schools. Not as a shining example.

I wonder what effect this will have on Randall Stephenson's bonus this year.
post #16 of 25
Quote:
Originally Posted by quinney View Post

I wonder what effect this will have on Randall Stephenson's bonus this year.

But they got what they wanted from the FCC - more spectrum in the band they desired.

http://venturebeat.com/2011/12/23/at...comm-spectrum/

I'm guessing that ol'Randall will do OK.

700 good! I never could understand why t-mobile's spectrum was desirable so I figured it was the towers. More 700 gives better service everywhere.

Edit: only the gov could sell use of a wavicle at a specific speed-length and get away with it. Next they'll try to charge for what we exhale. OOPS!

Edit 2: Stop quoting trolls and poes. That includes me if you're so persuaded.
post #17 of 25
Quote:
Originally Posted by TBell View Post

Just about every pundit thought AT&T had the deal in the bag.

That is simply a false - or at best, uninformed - statement. Any number of analysts were skeptical about the prospects of the deal.

All you need to do it to google analyst reactions in news reports from around that time. (I don't wish to do that for you).
post #18 of 25
Quote:
Originally Posted by anantksundaram View Post

That is simply a false - or at best, uninformed - statement.

Nuff said.
post #19 of 25
Quote:
Originally Posted by TBell View Post

AT&T proposed to acquire T-Mobile. The proposal was risky for T-Mobile because if the deal didn't go through, T-Mobile might have been irrevocably damaged by 1) customers fleeing thinking the company wouldn't be around, and 2) not being able to land needed deals for phones like the iPhone with the uncertainty of the deal floating around. To agree to the deal, T-Mobile required AT&T to promise to pay a 4 billion dollar penalty if AT&T couldn't close the deal. The penalty had nothing to do with fault, but was T-Mobile's price to cover any harm done to T-Mobile as a result of AT&T's failed attempt to get the government to approve the deal.

Thanks for this explanation. I couldn't quite understand why AT&T would agree to such punitive terms, but it makes more sense after reading this.
post #20 of 25
Quote:
Originally Posted by ChristophB View Post


Edit 2: Stop quoting trolls and poes. That includes me if you're so persuaded.

Is this addressed to me? I quoted anant and I don't think he is a troll or a poe.
post #21 of 25
Sorry, my bad.
How to enter the Apple logo  on iOS:
/Settings/Keyboard/Shortcut and paste in  which you copied from an email draft or a note. Screendump
Reply
How to enter the Apple logo  on iOS:
/Settings/Keyboard/Shortcut and paste in  which you copied from an email draft or a note. Screendump
Reply
post #22 of 25
Quote:
Originally Posted by quinney View Post

Is this addressed to me? I quoted anant and I don't think he is a troll or a poe.

No sir. I shoulda made a separate post. Sorry mate.
post #23 of 25
Quote:
Originally Posted by am8449 View Post

Thanks for this explanation. I couldn't quite understand why AT&T would agree to such punitive terms, but it makes more sense after reading this.

Pretty sure Google has agreed to similar terms regarding the MMI acquisition.
post #24 of 25
What's a poe? Is Edgar Allan in here somewhere?

Edgar...? Edgar...? Edgar...? Bueller...? Bueller...? Edgar...? Bueller...?
post #25 of 25
Quote:
Originally Posted by 2oh1 View Post

What's a poe? Is Edgar Allan in here somewhere?

http://en.wikipedia.org/wiki/Poe's_law

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: iPhone
AppleInsider › Forums › Mobile › iPhone › AT&T, T-Mobile file plans to transfer $1 billion wireless airwaves