Sundevildaddy

What: Winding down and wrapping up to settle in for the night.

♪ : Layla – Derek & The Dominos // Layla And Other Assorted Love Songs

 

This one strikes home for me.  AT&T, formally announced in March of this year, agreed to purchase T-Mobile for $39 Billion in cash and stock, which would make it the largest cell phone carrier in the Nation.

I say this strikes home for a couple of reasons, first and foremost, I am currently switching carriers for our cell phones as I am COMPLETELY unhappy with the pricing of our service.  Especially when so many deals are to be had elsewhere.

Only thing the big V has to say on the matter is “But we have the best coverage around!”  Um, and?  I may not live in a major metropolitan area, but I don’t live in the sticks either.  Do I really care there’s service in the farmlands outside of some population 300 town an hour away from me, that I’ve never even so much as driven through? (OK, I will concede, I MIGHT have driven through there at some point.. but I don’t remember.. I must have blinked)

Also, I have had both T-Mobile and AT&T service, though it’s been several years.  They both, in my personal opinion, suck royal eggs, and would never return to either one under any circumstance.

After the public announcement of the planned buyout from Deutsche Telekom AG, The US Justice Department filed suit on Antitrust charges to stop the deal, citing (and rightfully so) that the deal would unfairly reduce competition in the market and possibly harm consumers by raising prices.

Under the Open, Competitive Market Model, the general idea, under these circumstances, is that competition, and consumer choice,  governs business practices and price models.

As an example:  Say Carrier A offers a 1500 minute, Unlimited Text & Data package for $79.  Now, Carrier B offers the same package for $69.  Carrier A ($79) will realize that their prices are higher than Carrier B ($69) and, under common sense rules (which don’t always seem to apply to the Corporate World – just look at Netflix and Yahoo’s, among others, latest blunders), Carrier A will not raise their rates higher for fear of a Customer Run to Carrier B.  And, typically, if they maintain the higher rate, they need to polish their salesmanship, promote a broader audience and offer something that Carrier B doesn’t.

*Verizon Wireless does this by having the largest wireless network (both in Towers owned, and ‘Leased Air’) and high caliber phones and business packages.  Sprint does so by offering better quality Customer Service (typically), Rather high end, good quality equipment, and a few service perks here and there.

**The above example (Carrier A and B) is assuming both Carriers offered identical packages, phones and coverage.

This, in turn, keeps prices in check and allows the consumer (you and me) to choose from different providers of a service or product which we desire.  So long as that competitive balance remains in check, prices stay reasonable and attainable for a larger percentage of the population.   In other words, we don’t get raped for something we are growing increasingly more reliant on.

Now, based on Customer base, the Top 4 “Premium” Wireless Carriers are as follows:

1. Verizon Wireless (Cellco Partnership) with 107.7 million subscribers as of Q3 2011.  They also own the highest number of cell towers, with the broadest coverage map in America.
2. AT&T Wireless (Formally, AT&T Mobility LLC) with 100.7 million subscribers as of Q3 2011. (Ironically, AT&T came in last on Consumer Reports list of Premium Wireless Service Providers on all fronts!)
3. Sprint (Sprint Nextel Corporation) with 52 million subscribers (Not including Sprint Prepaid Group which owns Boost Mobile and Virgin Mobil USA)
4. T-Mobile (T-Mobile USA, Inc, a subsidiary of T-Mobile International AG) with 33.73 million subscribers.

And just to throw out this bit of information, here is what Consumer Reports had to say on the matter (In order of Customer Satisfaction where First is Highest, Fourth is Lowest in Customer Satisfaction):

1. Verizon

   This carrier was among the more satisfying in almost all cities in our survey.

   Verizon Wireless, the nation’s largest carrier, is no longer the clear top dog in overall satisfaction with our subscribers, a position it held in most years since 2003. Sprint has pulled even in overall satisfaction, and T-Mobile is close behind. Two or even three of those top carriers are statistically tied in satisfaction in a majority of the 23 cities in which we rated service. Home to the Droid line of phones, Verizon also offers VCast Mobile TV, a broadcast service offering prime-time, news, sports, and other programs. The first to prorate termination fees, Verizon uses CDMA technology and offers a high-speed 3G wireless data network. Verizon has rolled out its faster LTE (Long Term Evolution) 4G network in many cities across the U.S. Verizon now offers most of its phones, smart and regular, with or without a contract.

2. Sprint

   This carrier was among the more satisfying in a large majority of cities in which it was rated in our survey.

   Sprint has made significant strides in overall satisfaction, virtually tying with perennial front-runner Verizon, (T-Mobile is close behind). Sprint scored better in some aspects of customer service, which is a remarkable turnaround from past years, when that was a weak point for the company. Sprint has strength in its generally lower pricing and its high-speed network. Sprint uses CDMA technology and offers a high-speed 3G wireless data network. Some phones also support its “4G” WiMAX (Worldwide Interoperability for Microwave Access) allowing faster streaming, downloading, and uploading of high-definition videos and other large files. The faster network also facilitates better Web browsing and supports video chats. Consequently, its home to the world’s first 4G phones: The HTC Evo 4G and Samsung Epic 4G. The company merged with Nextel in 2005, and maintains the Nextel network separately to offer walkie-talkie (“push to talk”) capability between compatible Sprint Nextel phones and those from Boost Mobile, a prepaid service that Sprint owns. Our survey results exclude customers who receive Nextel service from Sprint because their phones operate on the different iDEN technology. In July 2009, Sprint entered into an agreement to acquire Virgin Mobile, another prepaid carrier that uses Sprint’s CDMA network to deliver its service. Its WiMAX (Worldwide Interoperability for Microwave Access) 4G network is available in many cities throughout the U.S.

3. T-Mobile

   This carrier was among the more satisfying in more than half of the cities in which it was rated in our survey.

   T-Mobile’s typically lower prices, combined with overall satisfaction similar to that of Verizon in most cities, makes this carrier a bargain, though it doesn’t match Verizon in connectivity or customer service. Home to the T-Mobile myTouch and Motorola Cliq series (the “Google phones”). T-Mobile is among the least expensive carriers for Web access and for text and multimedia messages. T-Mobile uses GSM technology. It also has a HSPA+ “4G” network, and supports video chats. Most phones can be used outside the U.S. T-Mobile now offers most of its phones, smart and regular, with or without a contract.

4. AT&T

   This carrier scored lowest in satisfaction in almost all cities in our survey and was the worst-rated in almost all other respects.

   AT&T, the second-largest premium-priced carrier, was the only carrier with scores that dropped significantly in our satisfaction survey of Consumer Reports readers. AT&T is now positioned in last place overall and in almost every market we rate. It’s home to the iPhone. AT&T’s unique rollover minutes allow you to carry over unused minutes for almost a year. AT&T uses GSM technology. It also has an HSPA+ “4G” network. Most phones can be used outside the U.S. Some AT&T phones support AT&T Mobile TV, a broadcast service offering prime-time, news, sports, and other programs. AT&T’s prepaid Go Phone service was among the lowest-scoring no-contract services in our Ratings.

 

Ironically, J.D. Power and Associates ranked T-Mobile highest among major wireless carriers for retail-store satisfaction four years consecutively and highest for wireless customer care two years consecutively.  I find this hard to believe, but then again, that’s just based on my personal experience with them.  For me, the absolute worst is a tossup between, funny enough, the two carriers looking to merge, AT&T and T-Mobile.

So the question is, Should AT&T be allowed to purchase T-Mobile? or is the US Department of Justice well within their right to stop the merger in fear that the Open, Competitive Market will shrink too much and create unfair pricing and practices on Wireless Service?

This merger would make AT&T THE largest wireless carrier in North America, and would shrink our options, at least for Premium Wireless Service (if you want to call their service that).

Do you think this will give Wireless companies too much power and leverage to price services beyond reasonable, or even fair, levels?  Or do you think this is a good thing for the Marketplace as a whole?

I can’t see spending more than I do now for service.  As it sits, we pay $150+/- a month for 3 lines of service, after spending nearly $260 a month for, basically, the same package from another carrier.  On top of that, so far, I’m happier with our coverage and we all received better phones, at better prices, than anything we found anywhere else!  I’ll give you one guess who my previous carrier was, and its not AT&T, Sprint or T-Mobile ;p

With the Great Recession supposedly behind us (though, some sources say we’re on the brink of another), I see car prices dropping dramatically all over, both new and used.  I see home prices (still) tumbling.  I see prices for everything but the basic necessities dropping to lows I haven’t seen in years.  Are we really so attached to our cell phones that we’re willing, in a time of shrinking budgets and savings and skyrocketing unemployment, to spend More for cell service?  Especially when now you can have Unlimited calling, day or night with a landline, and unlimited texting with Google Voice, for $20 a month!  Cheaper if you use services such as Skype or MagicJack.

I can see, between the economy, if it doesn’t straighten out soon, and shrinking competition in the market with increased prices for service, will push us backwards on the hill of Technological Evolution.  We’ll be back to Cradle phones or wall mount Winder phones in no time  (ok, that’s an extreme exaggeration, but you get my drift)

Give me your thoughts!  Should AT&T be allowed to purchase T-Mobile?  Why? And what do you think it will do to the Marketplace?

~Sun

This entry was posted on Sunday, November 6th, 2011 at 3:41 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.