Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
So, now what?
AT&T’s pie-in-the-sky attempt to acquire T-Mobile USA came crashing down to earth this week in a heap that left many with at least some sort of pie filling in a place not designed to hold pie filling.
I am going to guess that most of that filling landed on, near or around the folks at AT&T, which you have to hand it to them, had the audacity to even attempt such a deal. I mean, when this thing was announced on the eve of this year’s CTIA event in Orlando – and by eve, I mean on the Sunday before the show was to start. A Sunday – nearly everyone was caught off guard. Not so much in that many were not talking about the next round of consolidation involving either Verizon Wireless or AT&T picking off either Sprint Nextel or T-Mobile USA, but caught off guard in that most people talked about such a thing happening typically after a few too many Apple-tinis.
And yet, AT&T did indeed have the chutzpah to not only announce such an outlandish deal, but to show it was so committed and confident that it would pay $3 billion in cash, fork over loads of spectrum it had to have and a roaming agreement it had no desire to ever give as collateral that the deal would go through.
Man! What I would have given to have been in that room when those terms were announced. I wonder if Deutsche Telekom had actually asked for more, though I can’t imagine what else it could have asked for, and this was the compromise, or if AT&T was just so confident it would seal this deal that it threw these terms out there in a showing of bravado not seen since Caerbannog.
That package is even more amazing now that AT&T has to actually pay it out. It’s like betting your life on something because you know there is no way you are going to lose, and even if you do you figure what you have bet is so absurd that there is no way who you are betting will actually try to collect. Then you lose … and you lose.
Classic.
To me the cash part of this whole fiasco is the least of AT&T’s concerns. I figure the company has $3 billion stuck in its waiting area couch, or at least in the couch of its lobbyists that I can only guess will be spending the holidays avoiding phone calls.
No, to me the best part is that AT&T has to hand over spectrum because a deal it claimed it needed to make because it did not have enough spectrum failed. The irony is rich in iron.
Sure, AT&T did manage to finally close on its purchase of 700 MHz spectrum assets from Qualcomm for the paltry sum of $1.925 billion, but from the sounds of it having to actually give up spectrum at a time like this has got to worse for moral than when the old AT&T Wireless was purchased by their old-school rivals at SBC and BellSouth working under the Cingular brand.
I can only assume that with the $35 billion in still has lying around and what I can assume is some anger in not getting what it wanted, AT&T will be on the hunt for spectrum no matter where it may lay. All that is needed now is someone with a lot of spectrum and no real desire to operate a network.
As for poor T-Mobile USA, sure they now have some added spectrum depth and a nationwide 3G roaming agreement. But, from the sounds of it, parent company DT is going to keep the $3 billion in cash and from what was said when the AT&T acquisition attempt was announced, DT has no desire to put any more efforts into its U.S. operations.
Analysts expect the carrier to continue hemorrhaging customers over the coming quarters, an issue exacerbated by its continued inability to offer Apple’s iPhone, a device that even regional carriers are now offering.
Hmmm …, let’s see. Here is a carrier with a lot of spectrum, but lacks a crucial device or any support from its parent company to be a credible threat in the near term short of starting an all-out price war that it can ill-afford to afford. And, with an election coming up in less than a year that could see a new administration that might be friendlier to big corporate mergers, I say we just start planning now for AT&T/T-Mobile USA Part 2 … coming to theaters in time for the 2012 holidays.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–I only have one extra this week and it’s just a piece of advice. Please keep your tongues in your mouth this weekend. It might be cold out there.
–We are saving our WOTW year-end wrap up for next week, which despite all of the other year-end wrap ups that have been thrown around to this point don’t actually include all of the year.
I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.
Bored? Why not follow me on Twitter?
