It's a natural fit for AT&T to buy T-Mobile. They both 3G GSM (UMTS) technology. T-Mobile is probably better in some key markets than AT&T, most notably New York (City).
The one issue with T-Mobile is it uses the fairly nonstandard 1870 MHz frequency. I don't know of any other carrier that does (anywhere). I assume this is because AT&T has the rights to the more common frequencies in the relevant markets? I wonder what technical and regulatory hurdles stand in their way for switching T-Mobile infrastructure to also do the "standard" frequencies.
Wireless really is a mess in the US. Europe and Australia have really benefited from choosing one technology (GSM). In the US you pick your carrier then pick your phone. Elsewhere you basically pick your phone then pick your carrier. Don't like you carrier? Swap your SIM. Problem solved. The US really suffers (from the consumer point of view) by this lack of carrier mobility.
It's my theory that US wireless is so expensive at least in part due to it being the most balkanized market in the developed world (and possibly the entire world).
I was hoping LTE would help alleviate this problem as it seemed to be on the road map for 3 out of 4 of the carriers (all but Sprint). Now I guess it's still 2 of 3. Sprint is still the odd man out with the (basically failed) WiMax technology.
I can see this acquisition facing some serious regulatory and legislative scrutiny.
> I can see this acquisition facing some serious regulatory and legislative scrutiny.
One can hope, but I'm not holding my breath. My guess is that FTC and FCC will make some comments, AT&T will make some small gestures, the deal gets approved and about a year later AT&T's plans increase in price by 15-20%.
And Slashdot and Reddit and a thousand independent tech blogs will fill with upset explanations of why this is bad for the market while no formal challenge or brief to the FTC is ever mounted.
Genuine question: Obviously it can't be challenged on anti-trust grounds (unless the original AT&T settlement applies here somehow), and I don't know enough US law to know what else might apply. I know many countries have a regulator for mergers that can sometimes apply a "bad for competition" policy, but I thought in the US that would only apply if it forms an actual monopoly?
I think your assumption is wrong that the FTC will only block these sorts of deals if a company has a monopoly. I think they actually have rules they generally follow about how big a company they'll allow given the number and size of other market participants. Not sure if it varies by industry.
If by "some comments" you mean hand waiving, and "small gestures" you mean agree to roll out LTE to a few major markets in exchange for a couple billion in tax credits, you're probably spot on.
> Wireless really is a mess in the US. Europe and Australia have really benefited from choosing one technology (GSM).
How are pricing plans in the US when you are roaming beyond your state? I live in Sweden, where I have a decently priced data and call plan.
However, as soon as I go outside of Sweden, which is a small country (9M people), I have to pay roaming charges. I don't mind so much the call charges, but they want €4/MB ($5.60/MB) for data. Which essentially means that I don't use data roaming at all when out of town unless on Wifi, and I don't travel much in Sweden. Ok, so I can get calls when I travel, but I hardly use the phone for calls, I use it for the data access.
Yes, I can get another SIM, but then I have to tell everyone who may call me that I have changed number for that week, which is not really workable.
These days, cell phone plans in the US are generally national plans with no domestic roaming charges between states or regions. International roaming still hurts though.
My iPhone is roaming on telenor. AT&T wants to charge me $19.99 per MB for data roaming here. Needless to say it turned it off and I'm using wifi when available.
Data roaming in Europe is truly painful. As far as covering a large geographic area, the US carriers sell plans that are convenient to use within the US.
Yes, I can get another SIM, but then I have to tell everyone who may call me that I have changed number for that week, which is not really workable.
Right now I'm travelling in Australia and have settled on getting a local pre-paid SIM with a few GB of data included. I purchased a Skype-online number and am forwarding my US Google Voice number to my Skype number, which I can answer either with Skype running on my phone (Nexus One) or directly with my phone (via Skype forwarding). Additionally I can tether my phone to my netbook via USB or wifi. (The people at Vodafone AU spent about 15 minutes trying to figure out if that was allowed on a pre-paid SIM.)
This is not exactly a simple solution, but is working for me on the road to make relatively cheap calls and I'm always reachable (when I want to be).
I'm not very optimistic about what will happen to my T-mobile bill with AT&T buying them.
Google Voice eliminates the problem of having to tell people to call you at a different number. As I understand it this was Grand Central's motivation for developing the technology in the first place.
Roaming beyond ones state doesn't change anything. So long as you are on your carriers network you are still fine. I moved from New Jersey to Arizona to Colorado and have had no extra fees.
However when I leave the country they want $10 per MB of data, and $1.29 per minute for calls, and $0.99 for text messages. (This is T-Mobile).
The data roaming on AT&T is actually relatively reasonable, as long as you sign up for their 'Smartphone International Data Package'. You can call to add it to the account before you leave the country, and remove it once you come back, they will even prorate it for partial month.
It's 20MB for $25/mo, 50MB for $60/mo, 100MB for $120, and 200MB for $200/mo.
I usually sign up for 200mb plan if I am going somewhere for a week, and don't worry too much about data usage (email, web, yelp app). Turn it few days after I am back, and all roaming charges had chance to post.
> However, as soon as I go outside of Sweden, which is a small country (9M people), I have to pay roaming charges.
This can be problematic for those always on the move (the US has an all-round advantage on domestic market size), but in addition to the 2007 and 2010 roaming regs, the EU is apparently looking at forcing more reasonable data roaming charges across the board.
The reason for this ridiculous prices is quite simple: cellular networks just weren't designed with data roaming in mind.
If you use data roaming, traffic from your device goes back to your home operator and only after that to Internet. I don't know if any significant changes were made in Rel-8 (Rel-10?), but for now that's how it works.
The most reasonable roaming plan I've found is with Japanese carrier Softbank. Last summer they released a ¥1,500/day (~$20) unlimited data plan. While roaming if you use any data, they charge you $20 but you can use as much of it as you want for a 24 hour period.
> The one issue with T-Mobile is it uses the fairly nonstandard 1870 MHz frequency. I don't know of any other carrier that does (anywhere).
I think you mean GSM/UMTS band II (PCS), as 1870 is in the uplink portion of PCS (1850–1910MHz). That's a pretty standard frequency in North America. All four major US carriers (ATT, T-Mo, Verizon, and Sprint) operate in it (CDMA band class 1 overlaps with UMTS band II), as well as Bell and Telus in Canada, and Telcel in Mexico.
The only somewhat-oddball spectrum T-Mobile has is AWS, which they use for UMTS service. Even then, that's still a standard band according to the ITU.
Wind, Mobilicity etc are all new (they popped in existence after our AWS auction), and only have limited coverage (outside of their coverage area, they all have sharage agreements with one of the big three). For example, Wind only services a few of the major cities, but the moment you leave Wind's towers range, you're switched over the Roger's network and are charged hilarious fees.
And our Big Three (Bell, Rogers, and Telus) are even worse than youres. It's beyond ridiculous.
Also of note that with Bell and Telus's new 3G network, Bell built out the Eastern half (its home base) and Telus built the Western, and they each share their networks with the other. That way, they could build out a next-generation network for half the cost, and twice as fast.
There are also a large number of non-major players (such as SaskTel in Saskatchewan, Aliant in the Maritimes, and so on) that are largely irrelevant unless you live in their coverage areas.
Not to belabor the point, but it's worth noticing that it was a lack of regulation that caused the mess in the US. The FCC should have just mandated one technology (as in most other countries).
Having the government decided which technologies can be used might have had some benefits here but it seems like there would be a lot less work on making technologies better and a lot more work on lobbying if that were the case.
While I don't think the mandate would have been a good idea, I don't think you can use the US as a case for 'making the technologies better'.
We're way behind everybody else...
Mandates worked for TV standards (original standard def). Then when high def came around, everyone was lobbying for their own formats with too many official formats.
The government could have just mandated that the industry had to settle on a single standard (without the government needing to specify which technology to use).
My (completely unscientific and as an outsider) observation is that this is only part of the problem.
The other part seems to be the attitude that customers are the enemy, who should be squeezed for their last cent while being provided with minimal service and support.
Add to that very weak customer protection laws and lack of competition.
Even if you could simply swap your SIM card to swap providers in the US, the majority of customers would not suddenly become portable; people don't want to pay $500 up front for a phone, even though they're paying more down the line.
A lot of people I know don’t want to pay $500 up front for a phone, but I think there is a lot of path dependency in this. It’s a lot more common in Europe to pay $500 or even more for a smartphone. When I lived in Denmark I did that at least twice. Americans are willing to pay $500 or more for an iPad. A non-trivial number paid $600 for the first generation iPhone, although not enough for Apple to continue with that model in the US.
Even if iPads or other tablets become subsidized by carriers, my guess is that a lot of tablets will still be sold without subsidy simply because people are used to it.
Another effect of being able to simply swap SIM cards is that there will be a larger population of useful old unlocked/unlockable phones out there with expired contracts. A lot of early GSM competition in Europe was driven by smaller carriers or MVNOs who could simply send you a SIM card to put in your old phone.
> people don't want to pay $500 up front for a phone, even though they're paying more down the line.
As far as I can tell, T-Mobile is (was?) the only major US carrier to even offer the option of buying a phone up front and then getting a month-to-month plan that costs less than the equivalent 2-year contract. That is what I use and all told it is going to save me about $200 over two years vs. a subsidy based plan. But if hypothetically my monthly rate were the same as what it would be on a 2-year contract, as it would be on AT&T, why wouldn't I take advantage of the subsidized phones (apart from lock-in)?
OK, there are prepaid plans, but the choice of phones (especially smartphones) is limited compared to what's available on postpaid.
Prepaid plans don't necessarily restrict your choice of phone. I have an iPhone on T-mobile prepaid. That requires unlocking, of course, but most other smart phones wouldn't even require that (and would have 3G)
Smartphones are only getting cheaper. My smartphone is an LG Optimus V, which was $150 without a contract (but it's bound to Virgin Mobile, a prepaid carrier). By my estimation the phone is all-around better than a 3G iPhone. Obviously I probably got the phone somewhere near at-cost (considering how hard the RadioShack employees push you against buying it) but smartphones will be dirt cheap soon enough.
I've been having problems with my Optimus V through Virgin Mobile.
It crashes in call (total power off); data availability hasn't been stable (I would say about once a week I have significant issues where I won't be able to use email, a browser, etc. for the entire day); maps/GPS is iffy; I think there are some interface design flaws.*
I used to have an iPhone 3G. I thought it was great.
I switched to VM for the plan -- $25/month for 300 minutes, unlimited text and data ($40/month for 1200 minutes).
Honestly, though, these problems haven't really bothered me too much. I've found that for $25 or $40 a month it's fine with me if the experience isn't "perfect".
I have Optimus V running AOSP Android 2.3( custom rom ) and it runs amazingly, underclocks when not in use , overclocks when using, great battery life and responsiveness. For the value of the phone and not being on a contract its an amazing deal.
I also have the VM Optimus V and the main issue I see is losing data connectivity occasionally then the phone not being able to get back onto the data network. However, turning airplane mode on then off usually gets things working again.
that's my phone as well. no problems so far. $150 up-front cost is great. but mostly i like the $25/month no-contract with unlimited data/text/web. i really wanted the Dell Streak, but that was a $75/month MINIMUM contract
By my estimation the phone is all-around better than a 3G iPhone.
The Optimus V is a late 2010 phone. My iPhone 3G is from 2008 and hasn't been sold by Apple for a full generation. Your comparison doesn't really make sense.
Not that they're that expensive new. But if portability was easy there would even be an omnipresent resale market for used phones, so even boring phones retain resale value, as is common in other countries.
If you don't want to pay upfront for your TV or laptop, you just use a credit card. And what is even more important here, if you can pay upfront for your TV or laptop, you don't have to pay any interest. There's no reason whatsoever your network provider should provide you a mandatory loan for your phone with completely non-transparent conditions.
I think the point that is trying to be made is that the $500 price tag is influenced by the fact that most people buy the phone subsidized, and never see that price tag. I.e. if there was no phone subsidization, then there would be more competition on the actual price of the phone rather than just on the subsidized price of the phone.
The one issue with T-Mobile is it uses the fairly nonstandard 1870 MHz frequency
Actually, T-Mobile uses the AWS spectrum (in addition to PCS/1900MHz spectrum) which has the uplink around 1700MHz and the downlink around 2100MHz. AT&T and Verizon both have AWS holdings as well as Cricket, MetroPCS, and others. It's standard spectrum and MetroPCS and Cricket are actively using it for service today. AT&T and Verizon seem to be holding it to use for LTE in the future when increased capacity becomes necessary.
Yep. "Hey government, you know that pipe we use to funnel every citizens conversations to you? That was nice for you, huh? We want to engulf another company. Let us. (Also their conversations go in the pipe.)"
> I was hoping LTE would help alleviate this problem as it seemed to be on the road map for 3 out of 4 of the carriers (all but Sprint).
Based on the auction maps, T-Mobile USA had virtually no LTE/700 spectrum space. So AT&T acquiring T-Mo should not change the mix on LTE/700.
The wild card is Frontier, which won the auction for the 'E' block for a large part of the US CONUS. Frontier is somehow interconnected with Dish/Echostar. See the maps here ..
What this guy is saying about the European mobile market is mostly false. In Europe you choose your phone around what carrier you have. It works the same way it does in the US where you have a choice of phones based on what your carrier is offering, the phone is locked to the carrier, and you cannot switch without a penalty. The only difference between US carriers and European ones are that the concept of buying minutes is just coming to Europe and most phone companies have very similar offerings of phones, just one of the reasons that make the mobile market there highly competitive.
No, in broad thrust it is correct. What needs separating out is contracts vs hardware, and prepay vs monthly billing.
Smartphones have historically needed handset subsidies to be attractive to consumers, so they tend to be associated with monthly billing and have locked hardware - but locked for the duration of the contract. After the contract has run out, you are then free to ring up your contract provider and have your phone unlocked. You can then swap out the SIM, unlike what you can do with e.g. a Verizon handset. Alternatively, you can visit your local disreputable phone shop and get your phone unlocked directly (i.e. in violation of your contract).
The hardware itself, because of the SIMs and relative uniformity of radio bands, is switchable. This is key.
You're also wrong about the concept of buying minutes just coming to Europe. Business phone users under contract have long bought minutes. But most phones have been feature phones, and sold in prepay situations, which means that they are unlocked right from the get-go.
FWIW, when I got my first phone, it was an unused one that was rattling around in a drawer. All I needed was a SIM, which was a token purchase and came with call credit greater than its cost; these days, SIMs come free in the delivery box with online mail order purchases, just needing activation.
My experience is limited to Germany, but I had absolutely no problem buying an unlocked Android phone and putting in a prepaid SIM. There are at least a dozen major prepaid providers (resellers of the four networks, but mainly e-plus) offering rather cheap prices (I pay 15 Euro/month for 5GB of data). I can move between carriers at a whim, no contracts.
The majority of people in Germany probably buy subsidized and locked (for the duration of the contract) phones but it is no problem to just walk into your local Best Buy equivalent, buy any phone you like and get your favorite provider to send you a SIM (or buy one directly there). It's not even that much more expensive than getting a subsidized phone (over the lifetime of the contract).
A bit further north, the prices for phones are exactly the same whether over a contract or paid up front; I'm not sure if it's law or just convention. The monthly plan is really just used to lure in customers (and by customers in lieu of a more traditional loan to buy the phone).
The one issue with T-Mobile is it uses the fairly nonstandard 1870 MHz frequency. I don't know of any other carrier that does (anywhere). I assume this is because AT&T has the rights to the more common frequencies in the relevant markets? I wonder what technical and regulatory hurdles stand in their way for switching T-Mobile infrastructure to also do the "standard" frequencies.
Wireless really is a mess in the US. Europe and Australia have really benefited from choosing one technology (GSM). In the US you pick your carrier then pick your phone. Elsewhere you basically pick your phone then pick your carrier. Don't like you carrier? Swap your SIM. Problem solved. The US really suffers (from the consumer point of view) by this lack of carrier mobility.
It's my theory that US wireless is so expensive at least in part due to it being the most balkanized market in the developed world (and possibly the entire world).
I was hoping LTE would help alleviate this problem as it seemed to be on the road map for 3 out of 4 of the carriers (all but Sprint). Now I guess it's still 2 of 3. Sprint is still the odd man out with the (basically failed) WiMax technology.
I can see this acquisition facing some serious regulatory and legislative scrutiny.