Thoughts on the AT&T; T-Mobile Merger
Back in March, I had been sitting at home, talking to my girlfriend about how pissed I was about the potential T-Mobile, AT&T merger. I’ve been with T-Mobile for a few years, loving their network with my Nexus S, and she was on AT&T using my old Nexus One. However much I would have loved to have been together with her, I’m talking about carriers of course; I couldn’t stand it if the merger went through.
At that point I decided to write a letter to the head of the FCC, Chairman Juluis Genachowski, expressing my disdain With the help of my girlfriend I wrote it, and mailed it out the next day. The only reason why I bring this up is because I just recently searched for myself on Google, yes my ego does drive me to do rash things, and saw that it had been filed and posted onto the FCC’s website here. It was a jog to my memory that I thought I should share it with you guys…. Enjoy….
Dear Mr. Julius Genachowski,
On Sunday, March 20th, 2011, AT&T announced an acquisition agreement that had been made with Deutsche Telekom to purchase the cellular provider’s American branch, T-Mobile. I, amongst countless others, including other T-Mobile customers and CEO’s such as Dan Hesse of Sprint/Nextel, have found this news disturbing. The concept of a free, competitive market lies in the belief that the more players there are in the field, the more opportunity for innovation to develop. Allowing AT&T to purchase T-Mobile would stifle nearly all competition and growth in an already poorly developed field.
Out of the four major competitors in the wireless market, only two carriers focus on development and “pushing the envelope.” T-Mobile USA has had a major impact on the development of the wireless playing field over the past three years. They, along with Sprint/Nextel, pushed the price drops of unlimited voice plans by offering highly competitive pricing structures. In January 2010, both Verizon and AT&T dropped their unlimited voice plans from $100 to $70 to better align with the smaller providers such as T-Mobile. In addition, they have rapidly increased their HSPA (High Speed Packet Access) network to reach approximately 133 markets in 2009, excluding their expansion in Quarter 1.# This is an accomplishment that rivals larger providers, such as Verizon’s development of their LTE network that intends to cover 147 US markets.# Beyond their rapid HSPA development they also quickly converted their network into a 4G (HSPA+) network, which provided all customers a more reliable service at much higher speeds.
T-Mobile USA was also the first wireless provider to introduce the Android platform into the market, which is now the largest mobile platform in the world. The Android platform is the first viable competitor to Apple’s iPhone. T-Mobile is also the official partner of Google and HTC, and contributed to the release of the Nexus One in early 2010. The Nexus One was the phone that set the standards for an Android smartphone and the iPhone for the remainder of 2010.
One of the goals of the Nexus One was to introduce a phone free from carriers and carrier locks. Many customers purchased the device without a contract, which is typically caused by a need for subsidisation, and were offered unique plans referred to as “Even More Plus.” The “Even More Plus” Plans are unique to T-Mobile in the United States wireless market because it allows individuals to be provided with post-paid services without any need for a standard two year contract. These plans were offered are highly discounted discounted prices. The thought behind the two year contract is since the wireless provider subsidizes one’s phone, they expect to make back their loss in the course of two years by charging a consumer for it in their plans regardless of whether or not they had purchased a subsidised phone.# In this plan, T-Mobile is offering enhanced customer service by offering providers a fair deal if they choose not to purchase a subsidized device.
On the other hand, AT&T has also had a hand in the development of the mobile market. AT&T was in a remarkable position in 2007 when they introduced the first iteration of the iPhone. It was a major advancement in the smartphone market, offering the first device with a full touch screen experience. Unfortunately, most of their advancements have not been beneficial to the field nor to their customers.
A year and a half after the release of the revolutionary iPhone, AT&T crippled the device along with many of their smartphones, mainly BlackBerrys, by switching over their EDGE cell towers to HSPA cell towers.# This process began in the beginning of 2009. Without any information being passed on to the average customer, AT&T began to offer less coverage for the same price. This isn’t the only example of how AT&T has been crippling their network. As of late, AT&T has been under scrutiny from many of their “4G” customers. With the release of the HTC Inspire 4G and Motorola Atrix 4G, AT&T offered two impressive devices, other than iPhone and Captivate, for the first time. Many customers were excited for the introduction of 4G technology in their network. However, customers were disappointed to find that the advanced uploading technology, HSUPA, was no where to be found on their devices. AT&T’s official statement was that neither devices hardware supported this technology. So customers are forced to suffer through 3G, verging on 2G, upload speeds while they are being sold “4G” services. Many customers have been trying to petition AT&T’s actions and have been demanding an explanation. AT&T’s response was that the technology was actually there, but they haven’t decided to “turn it on” yet.#
Until last summer, AT&T also has not offered customers with any advanced devices. Their primary focus was their exclusivity of the iPhone, meaning that the company did not offer any viable competition for it. They finally released their first batch of Android devices, which they crippled. The Android platform is developed under the principle that anyone, anywhere can create an experience for their own. One of the most important aspects of creating a customized experience is to have access to an open market of applications. This is something which AT&T has been adamant in preventing. AT&T has actively blocked all of their devices from having third-party-applications from being installed on them.#
A merger between the two companies would mean that a small company of innovation will be squashed by a stagnant giant. The purchase of T-Mobile is not for the development or advancement of the wireless market. No such advancement would take place; all of T-Mobile’s uniqueness and the company itself would dissolve. Furthermore, AT&T has stated that, as a result of their purchase, T-Mobile’s AWS spectrum would be used to benefit AT&T customers, while T-Mobile’s customer’s services and devices would become obsolete.#
Ultimately, the merger of these two companies would shape the playing field in the wireless market for years to come. AT&T has a proven reputation of dismantling innovation, providing poor service to customers, and being stagnant to change. While one would hope that T-Mobile’s nature would too be incorporated into AT&T, it has been made clear that this “merging” is for no such intention, and would stifle the wireless field while adversely impacting the close to 35 million T-Mobile customers.# As a T-Mobile customer myself, I would hate to see a company fall victim to a degradation in service due to government inaction.
I implore the Commission, along with the Department of Justice, to reject the proposed merger of these two companies.
Enjoy/Print the document in it’s original format here.
Originally published at blog.mehdisolati.com on October 24, 2011.