The odds against a Sprint bid to acquire T-Mobile US seem to as long as ever. Sprint Chairman Masayoshi Son and Chief Executive Dan Hesse reportedly were "surprised" by U.S. Justice Department and the Federal Communications Commission opposition to the merger.
They really should not have been surprised. The Justice Department signaled clearly its conviction that the U.S. mobile market already is too concentrated when AT&T tried to buy T-Mobile US. None of that has changed over the past two years.
In fact, some might say a T-Mobile US resurgence works against any attempted acquisition, as it suggests meaningful competition is possible under the present market structure.
Whether heightened competition is possible over the longer term is likely the bigger issue. Many would argue that neither Sprint nor T-Mobile US have the financial ability to weather a prolonged marketing war that reduces average revenue per account and gross revenues.
If that proves to be true, then a merger eventually might be viewed differently, but only after both Sprint and T-Mobile US have become financially more weakened than they are at present.
Almost perversely, an eventual merger of a weaker Sprint, and a weaker T-Mobile US, will make success in the competition with Verizon Wireless and AT&T Mobility even tougher.
But that is a likelihood, if antitrust officials will not allow a merger at present. The old adage about bankers making loans only when the customer doesn't need a loan probably applies here.
Antitrust officials will approve a merger between Sprint and T-Mobile US only when it is too late to prevent creation of an effective mobile duopoly.
As sometimes, perhaps often happens, current policies will create precisely the outcomes the said policy hopes to avoid.
Monday, February 10, 2014
Sprint Execs "Surprised" by Opposition to T-Mobile US Bid?
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Subscribe to:
Post Comments (Atom)
Consumer Feedback on Smartphone AI Isn't That Helpful
It is a truism that consumers cannot envision what they never have seen, so perhaps it is not too surprising that artificial intelligence sm...
-
We have all repeatedly seen comparisons of equity value of hyperscale app providers compared to the value of connectivity providers, which s...
-
It really is surprising how often a Pareto distribution--the “80/20 rule--appears in business life, or in life, generally. Basically, the...
-
Is there a relationship between screen size and data consumption? One might think the answer clearly is “yes,” based on the difference bet...
No comments:
Post a Comment