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:
This week’s crazed merger news witnessed T-Mobile USA announcing plans to acquire MetroPCS, putting together a pair of carriers that recently have found it difficult to compete in the market. The thought process here – I assume – is that by combining two struggling operations the result will be one that is prosperous. This can be viewed mathematically using this obvious equation:
-1 + -1 = 2
I am sure most of you with even a rudimentary awareness of that witchcraft known as “math” can probably figure out that in the real world this equation does not seem possible. You would assume that the result of adding a pair of negatives would be a larger negative. An assumption I believe thousands of years of mathematics have proven.
Further confusing the number-people here is the fact that the deal is being positioned as MetroPCS acquiring T-Mobile USA from its parent company Deutsche Telekom, with the result being DT owning 74% of the new venture. So, for MetroPCS’ work in “acquiring” T-Mobile USA, it comes out owning just 26% of the operations. Aren’t numbers fun!
The companies involved in this deal, as well as the deal’s cheerleaders, quickly noted that the combination of T-Mobile USA’s GSM/GPRS/EDGE/HSPA/soon-to-be-LTE network will be a compliment to MetroPCS’ current CDMA/LTE offering. I can only assume they feel it will be complimentary because they will be able to use every letter on their keyboards to describe their network technology, and that is something most carriers can’t say.
Of course, those with a more skeptical eye would say that having networks involving all letters of the alphabet is actually not a good thing. An interesting point of view, though it does seem a bit harsh to some letters.
This skeptical viewpoint seems to come from those who remember a deal announced some 8 years ago between a Sprint and Nextel that also was to result in network operations spread across all 26 letters. Sure, there might have been some other issues involved in that deal that resulted in what most claim resulted in a calamity for all involved, but the overarching theme is that more letters is not a good thing when running wireless networks.
T-Mobile USA seemed cognizant of that theme when it announced the MetroPCS deal, taking time to point out that this acquisition was not like that one with management noting that this deal is really set to coalesce around the rollout of LTE services. Fair point, but there are still some legacy networks that are in need of continued support until that LTE utopia is met, and history has shown that running divergent networks most often works out the benefit of rivals.
This also brings up the news that Sprint Nextel is trying a last-minute end-around by throwing out its own offer to acquire MetroPCS. After having reportedly failed to do so earlier this year, Sprint Nextel is reportedly holding a board meeting today to discuss another offer.
While a Sprint Nextel/MetroPCS deal would seem to make better alphabet sense, does Sprint Nextel really have the bandwidth to deal with an acquisition while at the same time trying to chase rivals with its LTE build out? I know that all that really matters in matters involving MetroPCS is its spectrum holdings and clout in the prepaid space, but this might be one of those situations where Sprint Nextel could end up winning by not playing.
I say let T-Mobile USA go through all the stresses involved with trying to integrate MetroPCS while sitting back and picking off the collateral damage that comes from disenchanted customers. I think we all know how well this has worked out for Sprint Nextel’s rivals during the ongoing integration of that one-time loyal Nextel customer base.
Listen, I understand that desperate times often call for desperate measures, and that for all carriers involved in this M&A frenzy this would indeed seem to be desperate times. But, forcing a relationship that just should not be, rarely results in something good for any of the parties.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–I have spent the past two weeks attending a pair of industry events, and for the most part have enjoyed the experience. Both events were of the smaller variety (CCA in Las Vegas and PCIA in Orlando), which for those who have attended the cage-matches that are the Consumer Electronics Show and Mobile World Congress, is a nice relief.
However, all was not peachy-keen at these small shows, and in general showed some limitations to the whole trade show/conference situation we find ourselves in.
First, trade shows/conferences are still about 1 day too long. It seems that many of the events attached to these shows can be curtailed/edited/combined with others to tighten the events into a more cohesive package. These are not music festivals that need to be spread out over days in order for people to partake in multiple drinking/hangover cycles, or at least for those industry events not held in Las Vegas. These need to be compact, concise events that drill the needed knowledge into our heads at a rapid clip before we are able to lose focus.
Second, my advice for show putter-oners is that when having some people on a stage talking, please don’t use round tables for those in the audience. This is most often the case for smaller events that have a “lunch” session where those attending are trying to stuff their faces with food while someone on stage is trying to stuff their ears and minds with information. (Obviously, this is way too much stuffing for anything outside of holiday meals with the family.)
Third, and perhaps more important for those traveling west to east across several time zones, how about taking it easy on start times for some of these events? I know that with some of my recommendations noted above that to get in all the information at a show, there needs to be longer days, but do we really need to begin these things at 8 in the morning? I know that is not that early in the real world, but for people that are forced to travel to these events, outside influences often make it difficult to be their usual spry selves so early in the morning. Jet lag, uncomfortable hotel beds and partaking in one too many after-hour activities all add up to making that early start time a difficult vector to nail.
—HTC this week unveiled the first quad-core smartphone for the U.S. market in the One X+. (Why not go with “1 ex-plus?”) The device has all the bells and whistles you would expect to show off its core-tastic guts, and I believe officially will allow everyone to claim that consumers can now purchase a smartphone with more computing capabilities and processing power than enjoyed by half of the world’s countries.
I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.
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