Bloomberg reported today that Sprint is in talks to buy T-Mobile, the U.S. wireless division of Deutsche Telekom, according to the usual unnamed sources. As a result, shares of both companies are moving, tongues are wagging, as are the fingers of technical analysts saying such a tie-up might not be a very good idea given the technical differences between the two networks. After all, look what happened the last time Sprint tried to absorb a foreign network, Nextel, back in 2005. That wasn’t pretty for Sprint or its shareholders. But Wall Street loves news, whether it is true or not, and I am fairly certain this news isn’t true.
Not that Bloomberg would let that get in the way of a good story.
Here’s the real news as I understand it: T-Mobile has put its 7,000 U.S. cell towers up for sale, following a similar sale last year of its European towers. They’ll sell the towers then lease them back or rent capacity from the new owner so T-Mobile customers will never be able to tell the difference.
It’s not about phone service at all, just money. D-T wants a one-time gain probably to shore-up earnings or reduce debt.
Looking at the deal from this angle, the technical differences between networks become close to meaningless, since it is about real estate more than electrons.
AT&T and Verizon are locked in a death struggle based on who has the best network. As the biggest wholesale mobile carrier, Sprint can always use more capacity and this move might even give them an edge up on AT&T and Verizon in that network pissing match. Meanwhile, T-Mobile can still tout its “4G” network because for its customers nothing will have changed.
That’s where this process started a few weeks ago, I swear it. I almost wrote about it back on January 29th. Now if Sprint took a look in January then decided to make a bid for all of T-Mobile, I suppose that’s within the bounds of possibility: companies do stupid things every day.
But I think it’s just about the towers.
Wow, less talk on this subject than Libya…guess telecommunications is less important to people right now than world political issues for a change.
I’d guess this is all meaningless in the long term anyway. As long as we get good cell coverage who cares who owns the towers.
OK. I’ll start a rumor that will generate more talk…here goes: Apple is thinking about buying the towers.
2nd. BOOYAKASHA! Taste the flavor of this comment Robert Young!
The tube trains of London are full of ads telling us that T-mobile and Orange are sharing their networks – if you have an account with one you can use the others network.
Meanwhile Tesco supermarkets have set up their own mobile network – using capacity they are renting from one of the other networks (no idea which one can’t see anyone caring much either way).
I wish AT&T would buy those towers as do thousands of other AT&T customers locked into their cell service….
Many towers are already owned by other companies. One random company name as an example “American Tower Corp”. Most towers have equipment from more than one carrier on them anyway.
Sprint sold its towers to “TowerCo” in 2008. Their network is maintained by Ericsson.
almost nobody owns their own towers any more. sale/leasebacks, all of them. telcos, broadcasters, independents. most of that went away in the early 90s.
Gee, Bob, guess I missed the last two big announcements about the Cringely Startup Tour. When were they, by the way?
Thanks in advance.
Boy I hope you are right about this one. I am a Sprint customer and for a few years suffered through their horrible customer service. Things are better now and improving every day. Buying towers shouldn’t affect their customers and could be a nice money maker for Sprint. With some more towers, Sprint could expand their network and improve their coverage. That would be good too.
I tried to use Sprint’s International phone and service last summer. They contract this service from someone else. The service did not work, period, nada. Sprint was very good, returned all my money, and handled a bad situation well. Now T-Mobile has a pretty good International system. Maybe as part of this deal, Sprint job out its International service to T-Mobile. Better service, easier, cheaper. That too would be good.
( think Joe Pesci saying this)
OK OK OK, Google buys the towers and creates it’s own 4g network.
No No No, Apple buys the towers – for cash – and creates its own 4g network.
the silliness I saw on MarketWatch was that Der Herren would own a majority of the combined company. that’s rich. Der Herren can’t get it done in the market even after a big bandwidth upgrade (their “4G” is really 3.xG, but it’s quick), so now they want to latch onto another network in trouble, technically incompatible times two considering Nextel and drive the combine into the ground as well.
if they can’t get it done, get out. as in 100 percent. the logical merger partner is ATT Mobility. total sale, assignment of frequencies and customers. change the SIMs and the dual-band stuff in customers hands at least will work.
Sprint, which is stuck with the Clearwire bills now and to come because Clearwire can’t find any money and Sprint’s real 4G is dependent on those guys, would probably love to bail and let Der Herren sort it out.
if T-Mobile would fix their CRM and do a 180, bending over backwards for their customers instead of reputedly spitting at them, they could whip it up on Sprint Nextel Clearwire (for Sprint is going to end up owning Clearwire by default.) the story goes they’re short on bandwidth. Our Friendly Feds have auctions coming. fix problem A, surly customers trampling each other to bail out the windows, get money to fix problem B.
T-Mobile don’t want customers – I tried to switch to them last month (from Sprint) and was told that they would only accept me as a non-contract customer – I was trying to buy a Nexus-S phone.
They were such a pain to try to get signed up with that in the end I bought the phone and signed up with AT&T – worked like a charm.
Unless I’m mistaken, that’s how the Nexus-S is setup. No subsidy, no contract.
This is a joke, right? T-Mobile has pretty much the best customer service in the industry. As for the other reply not understanding the genius and wonderfulness of the “Even More Plus” plans (which are optional for most phones)… not tying you in to a contract and actually competing on service, wow.
Yep, Sprint doesn’t own its’ towers either. I wrote about this on IntoMobile last year.
Sprint has seen the light: Verizon is moving to LTE, leaving Big Yellow as the sole CDMA carrier in the US. AT&T is already GSM and is going to LTE as the natural evolution of their technology. T-Mobile is upgrading their GSM network but holding off on LTE only because Deutsche Telekom doesn’t want to foot the bill. DT would like for T-Mo to be a major player, but they realize without a considerable investment, they will be the perpetual also-ran. That makes them open to a combination of some kind. AT&T and Verizon are out, as they are already too big and would face too much regulatory scrutiny. So the only major player left at the table is Sprint.
Sprint has painted itself into the Wi-Max corner. While the technology has merits, so did BetaMax. GSM/LTE has been and will continue to be the defacto world standard. Sprint needs a migration path, and has lots of unused bandwidth.T-Mobile has a built-in migration path and needs a lot more bandwidth than it currently has, bandwidth that’s not on the short-yellow-bus 1700Mghz AWS bands that render worldwide 3G roaming with its parent, DT, impossible.
DT needs to show a good return on its investment in T-Mobile, something that has been absent for many years. The only way it can do that is to sell of T-Mo, or combine it into a viable entity. Combining SprintNextel with T-Mobile makes a very sensible deal. In fact, It’s not only the only deal that can be made that makes any sense, it’s the only deal that will save Sprint AND T-Mobile.
Why talk to Sprint? The people they should sell to are APPLE.
(Of course if Apple can buy a combined Sprint+T-mobile so much the better.)
Apple has $54 billion cash. Sprint market cap is around $14 billion.
An Apple that doesn’t have to put up with carrier bullshit could do truly stunning things. I suspect the transition would also not be too hard.
(a) There’s no obvious reason CURRENT customers would leave T-mobile or Sprint. The number of rabid Apple haters prepared to actually do something about their words is fairly low. BUT
(b) The flow of customers from ATT (and VZW) would be quite something — constant every month for the next two years as each iPhone customer’s contract runs out.
In fact, when Apple actually structures this company properly, charging a single price for a byte regardless of whether it’s a data, SMS or IP byte, along with customer friendly innovations like
– aggressive transparent compression to reduce user’s data footprint
– sensible QoS
– a single contract for so many bytes of data transfer, that can be used in whatever damn way you want across whatever damn devices you want
they might even find themselves attracting every Android customer on ATT and VZW’s network.
Of course I can predict some pain and crying along the way. I expect that Apple, in their usual fashion, will have very little tolerance for backward compatibility — if you’re using some Nokia handset from 1998, prepare to buy a new phone or switch to a new network, because Apple has no interest in keeping you around (and your crappy phone that is reducing the efficiency of the cell it’s in by 3x). It would be interesting to see just how well a cell network could operate if it could abandon the past and run an all-IP network.
So what you are saying Apple is going to create its own Wireless company because their shitty equipment has problems working on other wireless networks? There was a report published recently (check Wired) which shows that Iphone performs significantly slower than other phones on both Verizon & ATT. Clearly Iphone presents additional overhead on the network.
Apple will overcharge everyone for the bandwith. Each time you connect to Itunes, which is mandatory, you will eat up some bandwith.
Never gonna happen.
1) Regulatory BS Apple would have to go through. They don’t like that much scrutiny.
2) Carrier backlash worldwide.
3) Apple wants everyone else to play on their playground, they don’t even want to try and play on anybody else’s playground. They’ve tried that before.
When the past is better, leave it alone. Why pay Apple for what has been free up ’til now (voip)? Besides, I don’t see the point in requiring iTunes to pay my phone bill.
You must have those numbers wrong, T-Mobile only have 7k towers to cover the whole of the USA! That is less that any one of the UK networks to cover a country less that a 10th of the size. No wonder you have coverage and capacity problems.
I think there’s a confusion here about what they call Points of Presence these days.
T-Mobile and other carriers here in the US don’t cover the entire country. AT&T/Verizon may cover 70-80%, maybe 90-95% of the population. T-Mobile and Sprint somewhat less.
In the UK, you might have 1-5 transmitters per “tower”, each transmitting about 25dbW signal strength. In the US, you may have 21-63 transmitters transmitting at 50-100dbW (authorized up to 500dbW).
We cover a bigger area, with less towers, but more actual antennas, and at higher power, thus longer range.
Wow, I want to thank you folks for the quality of your comments!
Now do you know who I would expect to buy those 7000 towers (though not T-Mobile)?
Amazon.com.
Nah, that would constitute brick-and-mortar. Amazon doesn’t do BnM. I see where you’re gong with this though. Amazon doesn’t need T-Mobile’s towers. While it would cut down on their bill to Verizon, it’s better to leave the management of telecom networks to the telecom types. Amazon would be better served jumping on the expanded Wi-Fi bandwagon, like Google, or with G.
The only possibility would be for Amazon to step in as the ClearWire saviour and take over Wi-Max as it’s own. That’s a darkhorse, but would solve a lot of problems for Sprint-Nextel, ClearWire, T-Mobile, Deutsche Telekom AND Amazon…
RxC, I haven’t a real clue what I’m talking about but I saw a TV documentary on S Korea working on small dirigible airships that they would propeller up to the strato- or mesosphere (100km?) where winds wouldn’t bother it. It would then be cheaply powered by the sun and proved cell coverage for a fair region. S korean is supposedly planning to cover their whole country this way. Cheap as borsch compared to towers. Maybe towers aren’t to way to go.
Sounds like an oxymoron: an ‘air’ship in a stable orbit, where there is no air to disturb it. Attach the word “solar” to it and everyone jumps on board. Good one.
What about spaceship, Ronc. Space is everywhere that is. Don’t know if you are being facetious but if not, a dirigible airships is the generic term for a Zeppelin or blimp. I think the “air” body was to get it up high, cheaply and then support all equipment. Once up there, solar panels generate the energy to keep it stable and run its equipment. I didn’t see the whole documentary so not sure of all facts.
You might find of interest http://forum.prisonplanet.com/index.php?topic=93217.0 where the pentagon has plans for such an airship of its own. Pretty well covers it all, I believe.
It doesn’t quite explain how it gets into space. It depends on bouyancy so it must displace a ton of air for each ton of weight. Won’t reach space w/o more vertical lift.
Though I’ve nothing of value to say in regards to the editorial (aside from “thank you!), the big black “YOUR JAVASCRIPT IS DISABLED” box over the first part of the text is completely redundant (the only reason for a reader’s JS to be disabled is because they purposely disabled it) and counterproductive as it obliterates much of the first paragraph.
It seems that AT&T’s battle with Verizon went up a notch, which hardly seemed possible.
Well, there you go. Sprint snoozed, and AT&T did an end-run defensive moved that just vaulted it to the top of the heap. It should have happened years ago, as T-Mo never really was competitive enough, and interoperability with its parent was always troublesome. Now, maybe those of us who are long-time AT&T customers will get a better selection of handsets earlier. We’ve been watching T-Mo with envy as they had the HD2, then the HD7, and all the cool Android handsets in between.
There were half-hearted attempts at GSM roaming in the US, now with the two largest GSM networks combining, and hopefully ditching the stupid 1700Mghz AWS band once and for all, GSM roaming should truly be seamless. Lets see what the FCC makes them peel off, and how AT&T takes advantage of the new economies of scale.
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