Sprint and T-mobile merge. Thoughts?

**TexasHusker** · 05-08-2018, 06:45 AM

Rarely do mergers and acquisitions result in better service and lower prices. Fewer competitors nearly always means poor service and higher prices. But of course, the Merger/Acquisition is always sold to the public as being beneficial. That's the company line.

M&As are normally done in an effort to increase prices through market power and leverage. Market imbalances occur when there are too few providers, and also too many. If left to a free market economy, these imbalances eventually are taken care of by default. The problem arises when the government creates an environment that tends to limit the market's ability to balance.

**GoodSteward** · 05-08-2018, 07:05 AM

Originally posted by TexasHusker View Post

Rarely do mergers and acquisitions result in better service and lower prices. Fewer competitors nearly always means poor service and higher prices. But of course, the Merger/Acquisition is always sold to the public as being beneficial. That's the company line.

M&As are normally done in an effort to increase prices through market power and leverage. Market imbalances occur when there are too few providers, and also too many. If left to a free market economy, these imbalances eventually are taken care of by default. The problem arises when the government creates an environment that tends to limit the market's ability to balance.

That's the typical story, but with John Legere, he does seem to play by different rules. I don't see why T-mobile would have come this far in changing wireless and being so different, just to turn into the bad guys they keep mocking. There are still 3 major players, and by their point in many markets, there is only 1 player. A lot of people can only get Verizon or ATT where they live, and they also are addressing broadband. Apparently, with 5g they want to offer home internet as well. They said over half of Americans only have one option for broadband(I have that same problem as I live outside of the city and can't get DSL or Cable, I have a form of wireless). This is supposed to create competition where there is none. In a major city, there are a lot of options. However, I know in my area Verizon is the only cell phone service people want due to everybody else covering so poorly. They don't realize T-mobile has been constantly building out, and we see better signals on my wife's T-mobile phone over my work Verizon all the time now.

**GoodSteward** · 05-08-2018, 07:09 AM

I think people are missing the point on this merger. On the service, you are losing one company to have "less" competition. But, because of so many underdeveloped networks and the lack of multiple options currently, the point of the merger is to cover better than the others so that there is more competition.

**TexasHusker** · 05-08-2018, 07:26 AM

Originally posted by GoodSteward View Post

That's the typical story, but with John Legere, he does seem to play by different rules. I don't see why T-mobile would have come this far in changing wireless and being so different, just to turn into the bad guys they keep mocking. There are still 3 major players, and by their point in many markets, there is only 1 player. A lot of people can only get Verizon or ATT where they live, and they also are addressing broadband. Apparently, with 5g they want to offer home internet as well. They said over half of Americans only have one option for broadband(I have that same problem as I live outside of the city and can't get DSL or Cable, I have a form of wireless). This is supposed to create competition where there is none. In a major city, there are a lot of options. However, I know in my area Verizon is the only cell phone service people want due to everybody else covering so poorly. They don't realize T-mobile has been constantly building out, and we see better signals on my wife's T-mobile phone over my work Verizon all the time now.

It isn't that they are becoming "bad guys." Mergers are good for the bottom line, because they reduce competition and allow more market leverage. The companies are not merging for the purpose of charity; they are merging to enhance profit. There's nothing bad about that in terms of business - business works that way every day. There is nothing inherently wrong or immoral about it.

I was just stating that as a general rule, mergers and acquisitions serve to increase prices and decrease service. A CEO would be a fool to admit such while simultaneously trying to sell the deal the the FTC. It is a wonderful move for shareholders of course, as well as himself.

**GoodSteward** · 05-08-2018, 07:44 AM

Originally posted by TexasHusker View Post

It isn't that they are becoming "bad guys." Mergers are good for the bottom line, because they reduce competition and allow more market leverage. The companies are not merging for the purpose of charity; they are merging to enhance profit. There's nothing bad about that in terms of business - business works that way every day. There is nothing inherently wrong or immoral about it.

I was just stating that as a general rule, mergers and acquisitions serve to increase prices and decrease service. A CEO would be a fool to admit such while simultaneously trying to sell the deal the the FTC. It is a wonderful move for shareholders of course, as well as himself.

Did you watch the video by chance?

**TexasHusker** · 05-08-2018, 07:46 AM

Originally posted by GoodSteward View Post

Did you watch the video by chance?

No sir. I haven't really watched the financial shows in years quite honestly.

**GoodSteward** · 05-08-2018, 08:06 AM

Originally posted by TexasHusker View Post

No sir. I haven't really watched the financial shows in years quite honestly.

It's a 10 min video by both CEOs explaining what the goal was. I know it's meant to put on a good show for what's happening, but it did make sense. They want to get to 5G first, so sure it is a profit move. No issue with that, but the idea of it being a bad move for customers is not as cut and dry. According to them, they are actually creating competition rather than reducing it, because no one company can develop nationwide 5G on their own. They will be the only one able to push it due to the recent acquisition of the 600mhz spectrum, and sprints 2.5ghz. By expanding all this, everybody wins. We get better coverage, more rural areas get more than one choice (creates competition), and they will get more money.

This was a needed move, IMO. Right now, this industry is spread too thin and progress has stagnated. Everybody else was just pushing for more speed rather than better coverage. So in city centers, you get 100mb/s, but outside of that you get 2 bars and a few mb/s, or in my case, I see 1 bar more than anything. T-mobile is the only one trying to really expand their network anymore, and this will speed it up. Maybe I'm narrow-minded, but I'm being hopeful. T-mobile's changes back to unlimited is the only reason everybody else has changed back. I just hope they stay aimed at the customer.

**Captain Save** · 05-08-2018, 09:30 AM

Mergers and acquisitions are bad for competition... but it's even worse for an industry like wireless service .. since the llittle guys can't just enter and disrupt the industry.

The only thing they can do is use the big guy's network to offer cheaper services.

**GoodSteward** · 05-08-2018, 01:44 PM

Did anybody watch the video? lol It sounds like you guys are rumbling the typically "they are just buying out the competition to get rid of it, bah humbug!"

They are merging to come against Verizon and ATT, and bring BETTER competition. Both CEOs are remaining to run their respective places in the company with T-mobiles CEO as the CEO. It isn't a buyout as much as it is a restructuring into a new company that keeps the name T-mobile. They are calling it the New T-mobile. At least in their words, but it makes sense. Tmobile already shifted the wireless industry back towards a good direction. ATT and Verizon are greedy but have slowly started following what T-mobile is doing. With this merger, they will be able to ADD an option for people where they currently only have ONE option. That is the opposite of what you guys are talking about.

Maybe I'm just blinded by my bias for Tmobile, but working in the tech field and understanding what I do about all this stuff, I think it will be a great thing. Sprint wasn't all that much of a competition anyway. They were going to go under eventually if they didn't do something.

**TexasHusker** · 05-08-2018, 01:55 PM

Originally posted by GoodSteward View Post

Did anybody watch the video? lol It sounds like you guys are rumbling the typically "they are just buying out the competition to get rid of it, bah humbug!"

They are merging to come against Verizon and ATT, and bring BETTER competition. Both CEOs are remaining to run their respective places in the company with T-mobiles CEO as the CEO. It isn't a buyout as much as it is a restructuring into a new company that keeps the name T-mobile. They are calling it the New T-mobile. At least in their words, but it makes sense. Tmobile already shifted the wireless industry back towards a good direction. ATT and Verizon are greedy but have slowly started following what T-mobile is doing. With this merger, they will be able to ADD an option for people where they currently only have ONE option. That is the opposite of what you guys are talking about.

Maybe I'm just blinded by my bias for Tmobile, but working in the tech field and understanding what I do about all this stuff, I think it will be a great thing. Sprint wasn't all that much of a competition anyway. They were going to go under eventually if they didn't do something.

That's awesome! This might be the first merger that increases competition and quality. Way to go New T-Mobile!

**GoodSteward** · 05-08-2018, 02:09 PM

Originally posted by TexasHusker View Post

That's awesome! This might be the first merger that increases competition and quality. Way to go New T-Mobile!

Sweet, I convinced somebody!

**TexasHusker** · 05-08-2018, 02:21 PM

Originally posted by GoodSteward View Post

Sweet, I convinced somebody!

I've never had T-Mobile but I feel quite certain all of Mobile Phone-dom is a racket.

**GoodSteward** · 05-08-2018, 02:27 PM

Originally posted by TexasHusker View Post

I've never had T-Mobile but I feel quite certain all of Mobile Phone-dom is a racket.

But I get free stuff, so they are my hero. I also think the government is going to save us. They give free stuff, too!

**msomnipotent** · 05-08-2018, 03:23 PM

I have been not-so-patiently waiting for T Mobile to do something great with the Layer3 tv merger, and so far it is nothing. I will decide once things actually start happening.

Sprint and T-mobile merge. Thoughts?