T-Mobile Says First Day With the iPhone Was “Gangbusters”
Lower-price iPhone will cost $400, analyst says
Is T-Mo’s trade-in program the best deal for my used iPhone?
After almost six years, the iPhone 5 is coming to T-Mobile. Already available on AT&T, Sprint and Verizon adding it to T-Mobile means it’s now a choice for every national cellular carrier. T-Mobile hopes to woo customers with their lower monthly rates and easier plans. Brett Larson explains more.
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See our neighborhood-by-neighborhood test results for 127 locations in 13 cities. Click the map for raw speeds, as well as Web page and video load times.
In our April 16 article “3G and 4G Wireless Speed Showdown,” we reported the results of our exclusive 13-city tests of the four national wireless services: AT&T, Sprint, T-Mobile, and Verizon. Our study is the largest and best-known independent test of wireless service in the United States.
Here, in Part Two of our story, we drill deeper into the massive amounts of data that we collected over six weeks in February and March of this year. Whereas the first article reported the 13-city average speeds of the carriers, in this story we detail the carriers’ performance in each of the ten testing locations we visited in each city.
Apple’s upcoming iPhone 5 will support T-Mobile’s network, giving the struggling fourth-place carrier an opportunity to gain ground on its competitors.
T-Mobile’s chief technology officer Neville Ray at the Consumer Electronics Show in Las Vegas this week told CNET and several other sources the chipsets in the new iPhone 5 will support the Advanced Wireless Services, or AWS, frequency the carrier uses in its 3G network.
Just because the iPhone 5 is capable of running on T-Mobile, however, doesn’t mean the companies will be able to strike a deal. Apple largely ignored past requests from the carrier to create an AWS-friendly version of the iPhone, and T-Mobile aggressively promotes Android phones it says are as good, or better than, the iPhone.
However, adding the iPhone 5 to its lineup would be a major boost for a network still reeling from its failed merger with AT&T. The company is reforming its business strategy after the lengthy nine-month process resulted in thousands of lost customers due to uncertainty about the carrier’s fate.
In addition to figuring out how to lure returning and new customers, T-Mobile is the only “big four” U.S. carrier that does not offer the highly coveted iPhone due to its HSPA+ network, which Apple’s device does not support.
More than its other challenges, lack of the iPhone is often cited as T-Mobile’s biggest hurdle to overcome, but that obstacle may be temporary.
Acquiring the iPhone is a costly move for a smaller carrier like T-Mobile. The carrier received a hefty $3 billion break-up fee from AT&T, giving it some cash to invest, but third-place rival Sprint will spend $20 billion over the next five years to sell Apple’s top-selling device and create a more data-friendly network. More
WASHINGTON—The U.S. Justice Department is suing to block AT&T Inc.’s proposed $39 billion takeover of T-Mobile USA, saying Wednesday that the combination of the second- and fourth-largest U.S. cellphone companies would hurt competition and likely raise prices.
The deal has faced tough opposition from consumer groups and No. 3 carrier Sprint Nextel Corp. since it was announced in March. Shares of AT&T were down 3.5%. Shares of Sprint, thought to be a victim of an enlarged AT&T, were 6.3% higher.
The antitrust challenge comes shortly after the Obama administration also blocked Nasdaq OMX Group‘s proposed offer for NYSE Euronextand is further evidence of its desire to put new teeth into antitrust enforcement after what it says was a record of lax enforcement under the previous administration. More
Today, Senator Herb Kohl, Chairman of the Senate’s Subcommittee on Antitrust, came out against the merger of AT&T and T-Mobile, with the Senator stating in a letter to regulators:
“It will likely tend to substantially lessen competition, lead to consumers paying high prices with fewer choices, as well as lessen the innovation that has been the keystone of this industry in the last decade.”
In a coincidental move (most probably orchestrated by the anti-AT&T lobby and aligned “public interest” groups), others on the House side came out with their own statement today, calling for heightened scrutiny of the merger.
None doubt that Congress is right to take a close look at the merger. Senator Kohl’s letter, as well as that of the House members, is a normal part of this process. Ultimately, however, the Department of Justice and the Federal Communications Commission must make the call whether consumers and the public interest are served.
Though one might conclude that one fewer competitor in a given market could harm choice and lift prices, effective competition is more than just market share. Most data show that the wireless market remains exceptionally vibrant for consumers. Post merger, three “national competitors” and numerous “local competitors” will remain in most U.S. markets, essentially leaving in place the present checks that constrain the market power and anti-competitive behavior of all wireless companies.
Though Senator Kohl and the others have their doubts, the marketplace will likely prove them wrong – it will continue to thrive, giving consumers great competitive services, devices and innovation at tremendous value.
The review process is long and fraught with many tricky obstacles that could doom the pro-consumer union of the two companies. One hopes, however, that it moves along expeditiously at the DoJ and FCC, as free as possible from the corrupting influence of special interests that either want to sink the deal out of animus for all things corporate, or want special handouts for their corporate sponsors who choose to blame the marketplace for their own failures. American consumers deserve no less.
The Minority Report was fortunate to get to speak with Mike Wendy, director of MediaFreedom.org, about these so-called “Public Interest Advocates” and “Consumer Groups” who oppose the proposed AT&T and T-Mobile merger, to the tune of tens of thousands of comments to the FCC, saying the merger would reduce competition.
As always, TMR strives to get expert opinions, when possible, so that our readers are armed with the truth I want to thank Mike for taking time to speak with us today.
The following is my short Q&A with Mike:
1) Could you please describe who these “Public Interest Advocates” and “Consumer Groups” are who are protesting AT&T’s proposed acquisition of T-Mobile for our readers… are they really just a bunch of concerned citizens?
In the tech space, there are a handful of activist, progressive (or further Left-leaning) groups that habitually “just show up” when companies need to address various matters before government legislators, agencies and the courts (we’re seeing one such instance now with the proposed AT&T acquisition of T-Mobile here in Washington).
These non-profit groups – including Public Knowledge, New America Foundation, Media Access Project, and Free Press, among others – derive a lot of their funding from organizations like George Soros’ Open Society Institute, the Ford Foundation, the MacArthur Foundation and the Rockefeller Philanthropic Foundation, to name but a few. In all, these charitable foundations have poured tens-of-millions of dollars into the “consumer groups” in an effort to shape policy, legislation and business practices toward a more “progressive,” “fair” and less free-market direction.
Many of the “consumer groups” also take funding from corporations, though they are generally loath to admit it. The corporate underwriters in this instance use the cover of the “consumer groups” to achieve things they could not otherwise do in the marketplace; hamstring / “knee cap” opponents; or work to leverage the given situation to extract benefits from the matter at hand.
They are hardly just “concerned citizens.” The “consumer groups” are professional, well-organized special interest lobbying shops, doing the bidding of anti free-market patriarchs and corporate underwriters instead of your “Average Joe.”
For the non-profits groups, it is a profitable affair, too. For instance, over the past five years, Free Press’ tax records show that it has received nearly $20 million in gifts, grants and contributions, which it has used to work to impose onerous, market-killing regulations at the FCC and the DoJ for its suitors.
2) Is the charge that this merger would limit competition accurate and shouldn’t we be worried about lack of or lessening of competitors in the market?
I believe that, though this merger poses unique questions for the marketplace and the economy, all of which deserve a considered look by the FCC, the DoJ and Congress (as any important merger does), competition will actually be heightened by the acquisition.
The merger will help improve the rollout of new and better wireless broadband services in urban and rural areas for AT&T and its customers. In doing so, it will also spur a vigorous competitive response not only from Verizon and Sprint, but the numerous other regional / local providers of wireless broadband services across America. Consequently, infrastructure will get better, helping more Americans get online wirelessly. And, services, applications, devices and content will respond positively, too. This is not to mention the fact that with better wireless broadband services for Americans, U.S. workers will become more competitive, stronger and productive.
We have been here before.
Since Congress re-wrote the communications laws in 1996, Americans have seen a natural, steady, and I will add beneficial, consolidation of the communications industry. While this may strike some as bad (especially the self-proclaimed “consumer groups”), it has actually enabled the industry to bring broadband Internet access to 95% of America in a very short time. Prices are good and stable. Customers are satisfied. Innovation abounds throughout the entire Internet ecosystem.
Yes, the number of wireless competitors falls by one. But, in most U.S. markets, 5 or more competitive options will remain. I believe, as with similar events in the past, the public should benefit from the acquisition.
3) Is all this opposition really just a smoke screen for forces that want to add new rules and regulations on the industry?
Yes. The “consumer groups,” as well as many government officials, see any given merger as a weak point for the companies involved. They recognize that the companies have a lot at stake in getting the blessing of the FCC and DoJ, which they must do before the transaction can become final, legal.
When this has happened in the past, the “consumer groups” and agency policymakers have used the process to impose conditions – like Net Neutrality regulations – that they could not otherwise achieve through open rulemaking, legislative or court processes. Many joke openly about the “legal extortion” by Uncle Sam, which occurs during merger reviews. Quite frankly, it represents a feeding trough of opportunity for those “opposed” to the merger – one that is gamed to the disadvantage of the merging companies, and most importantly, American consumers.
(Mike Wendy directs Media Freedom.org (www.mediafreedom.org). He has been in the tech policy space since 1994, focusing primarily on telecommunications and IT industry-related issues that have emerged over that time.)
This is not your mom’s Ma Bell. The venerable houselhold name, now transformed into a telecom colossus facing the incredible demands of the smartphone age, has announced plans to acquire T-Mobile. If approved by the regulators, the $39 billion acquisition will remove a major player from the industry, leaving the Big Three of AT&T, Verizon and Sprint to battle in the marketplace.
What does this mean for consumers? Mike Wendy, Director of MediaFreedom.org, believes that the transaction will foster competition in the cellular market and improve the quality of service and product offerings.
Join us for a discussion of one of the biggest business stories of the year at 10PM ET on Friday March 25 at Italian Tomatoes on Blog Talk Radio.