More Pointless Wireless Consolidation As T-Mobile Buys U.S. Cellular For $4.4 Billion
from the merge-ALL-the-things! dept
Just two weeks ago a new report showed how U.S. wireless price competition effectively ground to a halt immediately in the wake of the Sprint and T-Mobile merger. Consolidating the U.S. wireless sector from four to three major providers immediately muted price competition, much like every credible academic, consumer group, and deal critic predicted.
It also resulted in 9,000 layoffs, the exact opposite of T-Mobile’s promise that the deal would be “jobs positive from day one” (a promise that’s somehow still on the T-Mobile website).
What did we learn from this experience? Absolutely nothing.
T-Mobile, now the second biggest wireless carrier in the U.S., announced this week it would be paying $4.4 billion to buy most of U.S. Cellular, the nation’s fourth biggest wireless carrier. More specifically, T-Mobile will acquire all of U.S. Cellular’s wireless customers and stores, and approximately 30 percent of spectrum assets. I’d assume the rest will be acquired down the road, or gobbled up by Verizon.
As usual, executives are promising that the steady drumbeat of consolidation will somehow result in better, faster, cheaper service and more competition. They’ve framed the deal in such a way that they can pretend they aren’t basically eliminating a competitor:
“With this deal T-Mobile can extend the superior Un-carrier value and experiences that we’re famous for to millions of UScellular customers and deliver them lower-priced, value-packed plans and better connectivity on our best-in-class nationwide 5G network. As customers from both companies will get more coverage and more capacity from our combined footprint, our competitors will be forced to keep up – and even more consumers will benefit.”
You’re to ignore that T-Mobile’s last merger delivered on absolutely none of its pre-merger promises.
And amusingly, most U.S. press coverage does exactly that; from CNBC to USAToday, mainstream “journalism” outlets are reporting on this deal without making a single reference to the fact that T-Mobile’s last merger directly and documentably resulted in higher prices (T-Mobile just announced another round of price hikes last week), 9,000 layoffs, and a worse, less competitive product overall.
For giant wireless carriers, the reasons for these kinds of mergers are several fold, none of them having to do with product quality, reach, or cost. They deliver temporary stock bumps, short term tax breaks, and reduce any competitive market pressure to compete on price. This is all dressed up under a layer of gibberish about synergies that are almost never true but get mindlessly repeatedly by the press.
The question then becomes: will regulators approve the merger?
The Trump administration, which signed off on the last T-Mobile merger (without even reading deal impact studies) will most assuredly approve such a deal if Trump wins and approval is kicked beyond the fall elections. The Trump DOJ “antitrust enforcer,” Makan Delrahim, literally used his personal phone in his free time to help ensure the last shitty deal was approved.
A Biden decision is less clear. While the Biden administration has been a little tougher on antitrust reform in areas that get significant public attention, I’m not sure they block this deal. Telecom policy has been largely forgotten in the “big tech” policy era, and I could see them approving this deal under some flimsy pretense that it’s a minor transaction that could help bridge the “digital divide” in more rural markets.
However fierce the Biden FTC is under Lina Khan, the Biden FCC can’t even openly admit that consolidation is a major problem in public-facing statements. It would be interesting if they suddenly developed a backbone on this front, but I wouldn’t assume so. It’s a smaller deal, the approval of which probably won’t see much public attention.
But while the U.S. Cellular deal is far smaller than the Sprint acquisition, it’s still pointing a highly consolidated industry toward more consolidation (T-Mobile also just purchased Mint Mobile). And despite a lot of pretense by industry lobbyists and pseudo-objective think tankers on the telecom payroll, consolidation uniformly winds up being an absolutely terrible deal for workers and customers alike.
Filed Under: 5g, fcc, high speed internet, mergers, telecom, wireless
Companies: t-mobile, us cellular
Comments on “More Pointless Wireless Consolidation As T-Mobile Buys U.S. Cellular For $4.4 Billion”
YAY RUBBER STAMP FORMS!
What are those? Ones that literally say the exact same thing when “Applying” for something, so you just change the date and your signature. No need for changing anything else. It then just gets filed away and then forgotten about so that when the next one came in we can claim its a new empty promise. Glad wireless is able to do it like the media and ISPs and such can. The US government is the best government money can buy cheaply these days.
Re:
Worry not, 12 years later, when it’s been made public enough to not continue ignoring, they will be slapped with a $100 speeding ticket and a stern letter.
?This seems familiar.
This reminds me of the GAMES, the old Hardware phone system was doing.
HIDE THE PEA. Buying back and forth and around in a circle, Every phone company to the point, NO ONE can figure out who owns whom, nor the taxes for those companies.
If you could open an onion and Charge by layers, it would be fine. But this is creating Knots, in who owns What? When? Is there a mortgage, Cash settlement?
Anyone ever wonder Why the IRS is Obsolete in the hardware/Software they have?
It just occurred to me the left out the i from the Un-Carrier branding…
T-Mo the Uni-Carrier.
Why not just let this continue until there’s just one big corporation that owns everything, then NATIONALIZE?
Kind of like a “reset” button for the capitalist adventure. It’s all a giant house of cards, anyway.
Gibberish Countered by Gibberish
Phone service is one of the only things you buy that has gone down in price for 4 straight decades after you factor in inflation.
You’ve literally never gotten more value for a lower price on even the most expensive phone plans on the market.
$240 of today’s money would get you a mere 100 minutes of long distance per month on a 1980 landline phone plan. That same dollar now gets you a super computer in 4 people’s pockets, a high end camera in 4 people’s hands, plus unlimited domestic talking, unlimited domestic texting, unlimited domestic internet, unlimited talking in over 200 countries, unlimited texting in over 200 countries, and enough high speed internet for most people in over 200 countries, yet here you are whining like a toddler or spoiled, narcissistic adult.
Rave about how you spent $3000 on Taylor Swift tickets and $3000 on Starbucks last year, but conveniently forget those facts when you come here to cry about the fact those same dollars could have bought you 5 years of the best phone service and technology human history has ever known.
Want more competition because you’re still an ignorant whiner who isn’t happy getting the best ever for the cheapest ever? Okay, propose how you plan to redistribute the trillions of dollars of network infrastructure property under your new communist regime and see how your plan flies.
Why not cry about the fact device manufacturers make double the net profit margin that network operators do? Oh, yeah, you can’t and won’t do that because you have no clue what you’re talking about. Thanks for cluttering the internet with more useless, cry baby, emotional drivel devoid of any value 👍