A daily digest of IT news, curated from blogs, forums and news sites around the web each morning. We highlight the key commentary and demystify the real story.
The two remaining GSM/HSPA wireless carriers in the U.S. are to merge: AT&T (T) is buying T-Mobile USA from German parent Deutsche Telekom (ETR:DTE). And then there were three -- subject to regulatory approval, that is -- could this be the genesis of Verizon buying Sprint? In IT Blogwatch, progressive bloggers budget for bigger bills.
Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention Kinect-based Navigational Aid for the Visually Impaired...
Update 4, 7.40pm: add comment from Sam Gustina.
Update 3, 1.40pm: add comment from Prof. Kevin Werbach.
Update 2, 9.40am: add comment from Ashby Jones.
Update 1, 7.40am: add comment from Kent German.
Matt Hamblen brings facts:
[It] easily makes AT&T the nation's largest wireless carrier, ahead of ... Verizon Wireless and reducing the number of major [U.S.] wireless carriers ... to three. ... Consumer groups are sure to object because of concerns over ... competition, but some analysts said the deal ... won't lead to higher prices. ... It is subject to federal regulatory approval, where it will undoubtedly receive close scrutiny.
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Under the deal, Deutsche Telekom would receive an 8% equity stake in AT&T and a board seat. ... [It] will add T-Mobile's 34 million customers to AT&T's 95.5 million total subscriber base. ... enabling a quicker expansion of 4G LTE. ... AT&T will ... gain cell sites that would have taken on average five years to build without the transaction, the carrier said.
Om Malik is not a happy bunny:
The biggest losers of this deal are going to be the consumers. ... T-Mobile USA has been fairly aggressive in offering cheaper voice and data plans ... [which] has kept the prices in the market low enough. This has worked well for U.S. consumers.
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Phone handset makers ... just lost any ability to control price and profits. ... Verizon and AT&T ... are going to try to hijack Android to serve their own ends.
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T-Mobile has been pretty experimental and innovative. ... AT&T, on the other hand, has the innovation of a lead pencil.
And Dean Takahashi dissects the PR:
Heres the first clue that AT&T knows that its going to run into trouble with antitrust regulators ... In its press release ... AT&T said, The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal. ... The U.S. is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers.
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Clearly a preemptive effort to address the likely critics. ... Theres no doubt this deal is going to test the Obama administrations stance on antitrust.
Inzwischen, also sprach Kent German:
A big drawback ... is that anyone who wants a GSM phone will now have just one carrier. ... AT&T and T-Mobile may Use a "but, Sprint and Verizon Wireless are still around!" argument ... but that's an apples and oranges comparison. Yes, they CDMA/GSM divide will disappear as LTE goes mainstream, but that's not going to happen for a few years. ... So in the meantime, anyone who wants to use a phone in Europe, for example ... would have just AT&T as an option.
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Another carrier marriage will affect all corners of the industry. Verizon will face a threat from a combined company, no doubt. ... Sprint, on the other hand, could see an upside. ... It could use the merger as an opportunity to rebrand itself as the smaller, but pluckier and cheaper carrier.
Bruce Gottlieb was formerly Chief Counsel of the FCC:
Until last summer, I was ... senior policy advisor to the current chairman of the FCC, Julius Genachowski ... I was an advisor to Commissioner Michael J. Copps ... before that.
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It will be the tech and telecom issue in DC this year. The DOJ will apply standard antitrust law. ... And then there is the FCC ... [which] was created in order to manage the nation's spectrum resources. ... Democrats have typically argued that no one company should control more than one-third of existing mobile spectrum. ... Republicans maintain that spectrum ought to be allocated through open markets.
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Any company with a major transaction before the government suddenly gets a lot more cooperative on every other issue it has before the government.
But Ashby Jones thinks AT&T's no fool:
AT&T seems to understand what its up against, and has plotted its strategy carefully. Already, AT&T is pushing for the industry to be looked at ... essentially city by city ... it argues the industry is for the most part fiercely competitive.
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In a research note, Credit Suisse analyst Jonathan Chaplin said ... It is unlikely that AT&T would attempt a deal that they knew would fail; however, we cant see how they would get this through without massive divestitures and concessions.
And Sam Gustina agrees:
AT&T has one of the most ... powerful corporate lobbies in Washington, D.C., and you can bet AT&Ts lawyers will be working over-time ... to get this deal approved. AT&T has spent nearly $50 million on political donations over the last two decades ... making it the number one corporate political donor.
What does it all mean? Wharton's Prof. Kevin Werbach explains:
Access to spectrum is a limiting factor for wireless services. ... AT&T and T-Mobile have a variety of spectrum licenses, but T-Mobiles most significant asset ... is the so-called AWS spectrum in the 1700 megahertz range. AT&T hopes to use that to supplement its own spectrum for ... 4G. ... Its particularly valuable in markets such as New York and San Francisco where AT&T is very spectrum constrained. ... And AT&T would have access to more cellular antenna towers, which are sometimes more of a bottleneck than the spectrum.
Richi Jenningsis an independent analyst/consultant, specializing in blogging, email, and security. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email: itbw@richij.com.
