Comments on: What T-Mobile gains from a MetroPCS merger: Surgical spectrum

By: Kevin Fitchard

Kevin Fitchard — Thu, 04 Oct 2012 13:14:17 +0000

Hi Issac,

Okay, let’s assume this is really a spectrum transaction for T-Mobile, and the customers are secondary. Isn’t then a ridiculous premium to pay for a handful of licenses (they’re attractive licenses but they’re nowhere close the nationwide)? They’re giving away a third of the company, paying $1.5B and committing themselves to a long-term restructuring that’s only going to cost it more money.

By: Isaac Brown

Isaac Brown — Thu, 04 Oct 2012 03:53:20 +0000

T-Mobile’s core fan base (not just customer, but fan) has always been people that want to buy phones without subsidies and without carrier software while not being forced to pay a phone subsidy they didn’t use, no other major carrier in the US offers this. Unless they drop the non-subsidy plans, or raise their prices to AT&T levels, they will be fine. The focus of the merger is the AWS LTE spectrum (of which they will acquire even more from the Verizon cable company deal), not MetroPCS customers (which I’m sure they do want to keep if they can). The CDMA and 2G parts of the spectrum WILL be re-purposed on schedule.

By: Kevin Fitchard

Kevin Fitchard — Wed, 03 Oct 2012 20:07:05 +0000

Hi Mantikos,

They’re targeting first half of 2013, so it’s anywhere from 2 1/2 years to 3 years.

By: mantikos

mantikos — Wed, 03 Oct 2012 20:02:46 +0000

Except its not 3 years but only 2 since the deal won’t go through till 2013 and they CDMA netwrok ends in 2015…

By: College

College — Wed, 03 Oct 2012 19:58:51 +0000

I will… I don’t care about personal bias or preference (about starting a whole Android war)…. who cares.

This is business. And financials are showing T-Mobile is already in the midst of a massive exodus of their current customer base because of one reason…

The business question is how do you prevent starting a new mass exodus while also stopping the current exodus already taking place…. HINT: listen to the customers leaving and fix that one problem… (it’s hard and expensive yes – but welcome to the free market!)

By: College

College — Wed, 03 Oct 2012 19:55:08 +0000

I’m leaning on the opinion of Kevin Fitchard… I don’t see how the new company cannot experience a mess during the transition and see huge flight of consumers fleeing.

Remember, T-Mobile is in dire straights with hundreds of thousands of consumers already fleeing every quarter… because they no longer want to have service with them and their phones….

By: Kevin Fitchard

Kevin Fitchard — Wed, 03 Oct 2012 19:51:23 +0000

Hey College,

Check out the story I’m about to post :)

By: College

College — Wed, 03 Oct 2012 19:49:17 +0000

The question is how are they going to transition the existing customers to new compatible phones? If they simply offer phones in their current portfolio and then ask them for a 2 year contract commitment… customers will leave. Just how T-Mobile customers have been leaving in droves quarter after quarter.

The new company needs “Entice” the existing customers with incompatible phones to sign a commitment for 2 years with a phone they actually want. It’s clear that they want the iPhone.

I don’t see how they can prevent lots of Metro PCS customers and T-Mobile customers to leave and to instead stay an additional 2 years with a new contract without offering an iPhone. Again if you were a Metro PCS or T-Mobile customer that is already looking to switch to another carrier for the iPhone, why would you then sign a new 2 year contract and pay some up front cost for a phone you don’t want??? It doesn’t make sense.

T-Mobile has been bleeding what 500,000-600,000 customers because of the iPhone before… how will offering a new 2 year contract with the same phone lines be any different to stop the bleeding?

By: Kevin Fitchard

Kevin Fitchard — Wed, 03 Oct 2012 19:49:16 +0000

Hi JK,

Actually, AT&T cingular saw a huge flight of former AT&T customers from the combined carrier, it created a mess of both their networks, and delayed the rollout of their 3G network for God knows how long. And they were using the same TDMA-GSM technologies.

By: Kevin Fitchard

Kevin Fitchard — Wed, 03 Oct 2012 19:41:40 +0000

Good point, Dan. I bet the execs at T-Mobile would love to get out from DT’s shadow. They board will still be DT controlled, but in many cases (like AT&T-Mo) parent and child seem to be working at cross purposes.