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This doesn’t help AT&T at all. Not one bit. A recent filing submitted to the FCC has had a portion redacted by AT&T. No big deal, I thought. Somewhere in that redacted statement, though, they revealed that they’d only need $3.8 billion to bring 4G LTE to 97% of their subscribers at the current state of things.
Consider that – $3.8 billion. Yet, at the same time, they say they absolutely need T-Mobile at a cost of $39 billion due to their limited spectrum and other problems with trying to build their network. Sprint tried to refute that AT&T needed T-Mobile to build a 4G network and even gave them a quick idea of how it could be achieved. AT&T declined to listen, and instead insisted that they needed T-Mobile. The same T-Mobile that would cost them $39 billion to buy. Doesn’t add up, does it?
Let’s go over this one more time. AT&T says the $3.8 billion is too high a price to bring LTE to 55 million additional Americans who would otherwise have to stick with 3G. Yes, according to Ma Bell, $3.8 billion to bring LTE to the rest of their coverage area is financially unjustifiable. But $39 billion to buy out T-Mobile isn’t.
They claim T-Mobile’s spectrum is needed for the task of bringing LTE to more Americans, yet the redacted portions of the accidentally-publicized documents contradict that in every way. My apologies for repeating all of that. I just had to make sure that it all made sense. After further review, it doesn’t.
I’m sorry, AT&T, but we aren’t fools. And you have to think that the Department of Justice aren’t, either. This isn’t helping your case in the anti-trust investigation at all. You probably would have been better off not redacting your FCC filing because now you just look plain guilty on top of the blatant incrimination. Unfortunately, we won’t know how much this will hurt AT&T for a bit further down the road. Read ahead for AT&T’s response.
“There is no real news here. The confidential information in the latest letter is fully consistent with AT&T’s prior filings. It demonstrates the significance of our commitment to build out 4G LTE mobile broadband to 97% of the population following our merger with T-Mobile. Without this merger, AT&T could not make this expanded commitment. This merger will unleash billions of dollars in badly needed investment, creating many thousands of well-paying jobs that are vitally needed given our weakened economy.”
Am I the only one not seeing an answer to the real question at hand somewhere in there? [Electronista, Thanks to everyone who sent this in!]
Ouch though.
not ouch
The 39 billion is not some sunk cost. You can’t really compare a capital expenditure to the purchase of an entire business.
they need time not money. the network will crap out before they can set up the new buildout.
More reason why this needs to be stopped. This deal screws all parties involved except AT&T.
screws up nothing. at&t needs t-mobile, it provides the best network in the world.
exactly AT&T needs T-Mo. with out them they are still just a shitty company without a good phone. they focused waaaaaaaaaaay to much on their iPhone bullshit and not enough on their networks for their customers.
here is AT&T’s Motto
“When the competition gets tough, we just buy them out and sue everyone else that does better than us because we lack tenacity and innovation.”
maybe they should change that globe to a bitten fruit….this whole thing smells awful Apple-ish to me
Lmfao! You nailed it man. This is an Apple move to it’s core…pun intended lol
The 39 billion is not some sunk cost. You can’t really compare a capital expenditure to the purchase of an entire business.
AT&Ts main argument for the merger is that they NEED it in order to expand their 4G network. The point isn’t that it is a cheaper alternative, which as you pointed out it might not be, but that AT&T doesn’t need Tmobile, only $3.8 billion.
they do need it. in telecom, you cant just throw money at a problem. its a lot more complicated than that. at&t needs time too, the existing old at&t network has a limited time before it craps out, but i wouldnt expect you to know this.
if AT&T is so superior to everyone else as they and their fanboys claim to be, then why and how could they have old AT&T networks? wouldn’t they be on top of their shit?
Investing $3.8 billion on the infrastructure is not a sunk cost either. It’s going to give back revenue.
No problem AT&T, nothing a few SuperPAK donations to just the right polititions wont fix, just pass the expenses to your loyal customers and tell them its due to expenses in expanding to LTE or something
Just pass the expenses to T-Mobile’s screwed over customers.
:(
that is the damn truth
which is why i will be forced to go to verizon
“I’m sorry, AT&T, but we aren’t fools.”
You’re obviously not a Gov’t official, then.
Unless your on a lobbyist’s “Who to bribe/blackmail/kill list” your not a government official either.
Yes, I am.
They MIGHT mean that it would cost $3.8 billion to build out 4G/LTE support on their existing network, but that they can’t get their coverage to that ‘97% of the US’ target point without buying T-Mobile’s network and merging?
That’s giving them an awful lot of the benefit of the doubt, though.
I considered that angle, but the redaction negates that. They should have simply said that in the filing if that were the case. Not to mention the solutions Sprint provided that would help AT&T get their LTE network where they want it to be without buying T-Mobile. They didn’t even take a second look at any of that, from what I understand. They just want T-Mobile, don’t necessarily “need” them.
I really hope this is the bullet in their foot.
i find it funny that sprint is trying to give advice on how to get 4g to 97% of their customers nationwide when sprint doesn’t even cover anywhere near half of their own. . sprint needs to practice what they preach.
I’m pretty sure that financial advisers that give financial advice to billionaires are not billionaires themselves.
The upgrade path to 4G isn’t some mystery that only ATT knows and it is complete mystery. Sprint was only telling them how it could be done. You and I know Sprint doesn’t have the resources of ATT. The financial backing isn’t there with Sprint, but the technical know-how is.
AT&T is buying T-Mobile to eliminate competition. This will allow them to overcharge consumers which is something AT&T knows only too well. Getting rid of T-Mobile only leaves Verizon which likes to overcharge just as much as AT&T and Sprint which can’t even get 4G speeds to some of the larger metropolitan areas.
Don’t forget the international customer traveling to the US. There’s only one national GSM carrier now for them to spend their monopoly money. They want to use there own phone too like how Americans traveling to foreign countries buy local SIMs for their phones.
AT&T isn’t buying T-Mobile because they need the spectrum (they already have the most by a long shot), they’re buying T-Mobile because others do need spectrum. Think about it, AT&T eliminates a main competitor, makes it largely a two horse race between them and Verizon also eliminating Sprint as a competitor, and they get to hoard more spectrum from competitors. Its anti-competitive to the core, its not because AT&T is in desperate need of spectrum.
In the end, this doesn’t matter. AT&T has had the FCC in their back pocket for years now. Now that all the Baby Bells are reunited under their old banner, things will start to go back to where they were prior to the breakup. Of course, the mobile industry will be used as an example of how there is enough competition out there to justify such a big company, with regional carriers and Metro PCS/Leap Wireless/ZTAR mobile as an example.
Take a look here for a good breakdown: http://www.dslreports.com/shownews/Leaked-ATT-Letter-Demolishes-Case-For-TMobile-Merger-115652
I see you are having a hard time figuring out AT&T math. Don’t worry it happens to many of us. My home area, right between Charlotte NC & Ashville NC, not exactly the deep woods here, still doesn’t have AT&T 3G. For all the claims & boasting they’ve done about how fast & wonderful their network is, they can’t seem to even get 3G nationwide. Their reason? It’s too expensive? OK & $39 billion is a bargain?
Building out your own network to catch up with Verizon: $3.8 Billion.
Enlarging your network, your customer base, and eliminating a competitor: $38 Billion.
Having a monopoly: priceless.
Maybe they should finish out their 3G build out first, then they can get 4G out when everyone else gets 5G haha.