U.S. Cellular Tells The FCC It Has To Merge With T-Mobile Because U.S. Wireless Is Just Too Gosh Darn Competitive
from the merge-ALL-the-things! dept
Back before T-Mobile merged with Sprint you might recall that academics, consumer groups, and beat reporters like myself warned that the deal would immediately result in less competition, higher prices, and a whole bunch of layoffs. Captured Trump regulators ignored those worries, but it didn’t take long before the deal’s critics were proven indisputably correct about, well, everything.
T-Mobile quickly got to work laying off thousands of employees. Analysis quickly indicated that the merger, which reduced the total number of major U.S. wireless providers from four to three, immediately put an end to wireless data price competition in the States. And T-Mobile’s pro-consumer “uncarrier” branding disappeared almost immediately.
Fast forward to this year, and T-Mobile is now trying to acquire U.S. Cellular for $4.4 billion, because if there’s anything U.S. telecom clearly needs, it’s even more consolidation. In recent meetings at the FCC, T-Mobile and U.S. Cellular executives are trying to claim that they have to merge because the U.S. wireless sector is just so damn competitive:
“Competitive intensity has ramped up in UScellular’s footprint, with both traditional wireless providers and cable wireless providers increasing their competitive presence. That intensity has, in turn, led to aggressive pricing and promotions—and further challenged UScellular’s subscriber numbers and financials.”
Contrary to what executives claim, their markets aren’t suddenly awash in new wireless competition. MVNOs (like Ryan Reynolds’ Mint Mobile) that do try to disrupt on price, inevitably get acquired too. And while cable companies do create some competition in wireless, they’re largely leasing backhaul and other structural assets from the major wireless carriers, who still get their cut.
Data also consistently shows that outside of Canada, the U.S. sees some of the highest prices for mobile data in the developed world, so the idea that U.S. Cellular is facing some incredible pressure to meaningfully compete on price in this country is an industry fiction.
“We face some fleeting competition so we have no choice to be swallowed up by a competitor” is a pretty steady refrain, despite endless promises of amazing benefits and synergies that never actually materialize. What happens is the remaining companies see even less incentive to compete on price than ever, which is, of course, the entire goal of the performance.
In this particular transaction, 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 T-Mobile, AT&T, or Verizon later. While these deals do temporarily boost stock valuations and generate some lovely tax cuts, they’re actively harmful to the broader market, labor, and consumers.
But because Republicans and Democrats alike are both terrible on monopoly busting and the harms of corporate consolidation (though the latter is indisputably better than the former), I suspect this deal will be quietly approved. Likely with some argument that even more consolidation at the hands of captured U.S. regulators will somehow benefit America’s rural farmers.
Then, in a few years, when your wireless bill is even higher and the service quality and customer service remains in the toilet, policymakers, industry-backed think tankers, and the other folks responsible will stand around with a phony-confused look on their faces pretending to wonder precisely what might have gone wrong. Assuming they give any of it a second thought at all.
Filed Under: 5g, broadband, competition, consolidation, fcc, high speed internet, mergers, telecom, wireless
Companies: t-mobile, us cellular
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Capitalism at its best?
For many of you, older then 40. You may have seen this stuff happen before.
Why is it that MOST consumers can see whats happening More often then the Corps admit.
The Gov. Bends over Backwards TRYING to help the corps with our tax dollars, and STILL they tend to fail.
Said before, as with every game, If you keep adding money to the game it will never END.
We can tell what is happening, they are consolidating, and the Rules in the nation have been Blocked from Letting this happen.
Just got a Credit card notice, they are offering 30% interest. I could get a GoFundMe from Africa for LESS.
Re:
Because the corporations have teams of people paid to avoid admitting the obvious.
Re: Capitalism at its best?
Please, learn the difference between THAN and THEN. Furthermore, in “The Gov. Bends over Backwards” the words bends and backwards shouldn’t be capitalized, and it’s the same for Blocked and Letting. It’s incomprehensible—and regrettable—that a professional writer’s grammar has to be corrected by a migrant whose second language is English.
Re: Re: Sad
Get a life dude. Your commentary on the grammar adds nothing to the conversation. You’re a clown.
Re: Re: Are you an English teacher
I totally grasp what he is saying, and he’s correct. You have to have something better to do with your life than to correct people’s grammar. Please grow up
Re: Credit card interest
I just received a new J.C. Penney credit card unask for and the interest on it was 34% if you carried a balance which I never do. I just cut up and cancelled the card. Don’t need that and it was the principle of the thing.
NO! NO!!! A THOUSAND TIMES NO!!!!!!!
Re: I thought we lived in a capitalist country????
Wow..a company admits they can’t compete…I thought in capitalism you go bankrupt and let new companies get in the industry.. capitalism is not letting monopolies take over industries …again America preaches capitalism,but don’t truly believe in it!!!!!!
American politicians: “We can’t have huge companies create a monopoly in the social media space! We need to break up Big Tech!”
Also American politicians: “What do you mean, the phone service provider market is moving towards monopolization?”
THIS SHOULD BE BUSTED UP & NOT ALLOWED ! BAD 4 BUSINESS
Yeah, U.S. Cellular? And exactly how competitive do you think monopolistic competition is?
I’m stuck in a loop, trying to imagine a physical cable that has no wires…..
Tmobil & other corp mergers make politicians rich
The reason politicians push, allow or don’t allow bills and laws involving major corporations is because they have or don’t have some personal economic interests in them. They will shutdown bills or laws that would benefit our country solely based on it would negatively impact a business that they or their financial supporters have personal investments in. The same goes towards bills and laws that make no sense, that even a toddler knows will negatively affect this country, quite possibly bring this country closer to being an irrelevant third world power. This is no conspiracy just look at who the two best people our two largest political parties could find who wanted to run to lead this country! Our chief and nations leader should be a representative of our countries most important values and they chose a criminal & egotistical cheat and K.H. The backbone and co-signer for what is arguably the worst president in our history to date. It’s such an embarrassing time to be an American. Being a veteran putting myself in our current military service members boots, I would find it really difficult because I would be finding an answer to “what are we fighting for? “ a daunting & almost impossible task.
No to the mergers…. It hurts the consumer….
T-mobile acquisition of US Cellular
As a current US Cellular customer I get sick of outsiders looking in and offering their expert opinions about the planned acquisition of US Cellular by T-mobile. How about looking at this sale from the perspective of those whose cell service is directly affected by the acquisition?
My opinion is that the acquisition be approved. Why you might ask? US Cellular has been losing money providing cellular service. What are the options? Let the company go belly up or allow corporate raiders to sell off the assets—how does that help the rural customers of US Cellular who only get decent cell phone signal from this company?
So I urge the FCC or other regulatory agencies involved to approve the sale of US Cellular to T-mobile. T-mobile will be leasing many of the US Cellular towers so that rural customers like myself will continue to have cellular service in our areas.
Ma Bell
Do we remember when we had to break up MA Bell because it was a monopoly?
Now we need to break up the cell providers or the government!!
T-Mo and the Cell
The mergers in cellular data providers is being driven by hedge funds and private equity. The larger the company the more capital that can be diverted to stock repurchase.
AT&T and Verizon aren’t interesting because they already own billions in hoarded spectrum.
By aggregating the small fry together, with their low cost to entry these greed operators can build a new bus to carry new margins into their portfolios.
It’s the same mentality that has ruined the music business, broadcast (TV and radio), Hollywood, airlines, railroads just to name a few.
To guarantee more margin, you have to make the market less flexible, which in turn provides pricing power.
When US Cellular says “it’s too competitive” what they are really saying is we can’t compensate our hedge fund masters and invest in our network too, so we must merge with someone bigger. We can’t raise prices either so we throw out hands up and cry “merge”.
US Cellular not to merge with T Mobile
good afternoon,
I have been a customer with US Cellular for many years.. and I lived in between North Carolina and lived Virginia for 25 years in the mountains of elk creek, and US Cellular is the only phone carrier that worked up there, T Mobile and Sprint and Sprint and Verizon and anyone else, they stop at 77 North.. so I hope they do not merge with T Mobile if they do I wouldn’t use my phone if I went to vist my dad where I lived in elk creek, and. I refuse to change my service to T Mobile, and that is it in a nutshell.. sincerely, rio
Re: Reconsider
I’ve been where you are. Us Cel, then Verizon, now T-mobile. But you already pay a lot to US Cel, and get very little for it. You list nothing if they get bought, because they will also get the spectrum that you’re using in rural areas that T-mobile doesn’t already have. But you’ll also get much better speeds, national coverage, satellite to phone in places even US CELLULAR has no coverage like the mountains and ocean, and free coverage across the globe.
A bunch of small carriers benefits no one. They all need nation wide spectrum and coverage or they are garbage. People can say what they want about mergers, but the quality of service on T-mobile across the US, NA, and globe is much better today than prior to the merger. And they are still a great carrier with great service. Everyone on US Cel and T-mobile will win when they merge. And if US Cel is going to end up folding anyway, then what’s the point of making any fuss at all. Again, just my 2 cents. I want the US Cel towers added to my network.
Re: Competition
You know what the difference in service has been since T-Mobile bought out sprint? No difference at all. Except now we have cellular home internet where we only had DSL before. I doubt US Cellular being bought out by T-Mobile will diminish your service at all
FCC - please say no to merger
The 3 main carriers are awful. Let US Cell stand alone as a company and don’t permit merger. T-Mobiles coverage is terrible. They will take US Cells customers and then give them T- Mobile crappy service.
Uscellular
Uscellular switching to Tmobile will not be in their favor. I sale Uscellular for a living. And it always worked in areas around me, that Tmobile didn’t. In fact, the only reason my store does not let me sale Tmobile, is cause Uscellular works better here. To paint you a picture. I work for a third party sales team in walmarts. And all the walmarts south and west of my area. Sales tmobile and not Uscellular. The only reason walmart has Tmobile within my teams area. Is because, Tmobile doesn’t have good signal. So, if they jump onto tmobile towers, than they will not have good coverage in this area either. So walmart will probably just kick them out of these areas too. They should think really hard about this before it’s too late. They will loose a lot of money if they do.
The US hasn’t broken up a monopoly since 1982… 42 years because the politicians have all been blackmailed or compromised by these corporations in power so they go along with the agenda. BLACKJACK (owns 89% of S&P 500) , VANGUARD, and STATE STREET are the Enforcement Agencies where the 13 Families who run the world are allowed to hide behind the (RED)Shield who owns 80% of the world. It’s completely evident when watching our politicians and alleged NEWS that’s legally allowed to masquerade as propaganda by the CIA. Thats why they are going after Trump so hard, he will enforce The Sherman Anti-Trust Act and corporations don’t want to let go the cash cow they have fed, but it will be slaughtered shortly.
T mobile
Exon Mobil 1970! We will never take advantage of the consumer because of consolidation ! Hahahahaha
Who Is best???
I recently ordered a “cell phone. Didn’t get it turned the whole 6-7 weeks.Last week, took it to a Spectrum store a got told off by a lady. Asked my why I had downed all kind of crap, it got turned on after she got. I never got call on it or made one Spectrum will screw you just like all the rest She fixed this one so I can call out or receive a call. That is totally all I can do. Any suggestions?