T-Mobile US Not Acting Like a Firm that Believes it is About to be Acquired

U.S. regulators would prefer a stable long-term mobile market lead by at least four viable contestants. Whether that will remain the case is the issue.

And T-Mobile US, the firm thought most likely to be acquired, eventually, by somebody, seems to be taking no chances.

When AT&T proposed its acquisition of T-Mobile USA, T-Mobile essentially put its marketing efforts on autopilot, doing nothing exceptional to protect its markets and customers from losses, while awaiting approval of the transaction, which never came.

This time around, T-Mobile US is protecting itself by continuing to promote and market as though the potential deal is not going to occur, or be approved.

In June 2014 T-Mobile US is likely to launch additional features of its “Uncarrier” campaign, perhaps including measures such as advertising “all in” retail prices that include all taxes and fees, something mobile service providers generally avoid, for good reasons.

Including all taxes and fees in retail offers means the posted prices are higher than consumers are told. But such “everything included” pricing arguably is more fair, as the “total” charges and the “as advertised” charges are the same.

That older practice is analogous to the way airlines often display prices--without add-on taxes and surcharges.

T-Mobile US might also stop charging prorated fees that represent the fraction of a full billing cycle users often encounter, before the start of the next full monthly billing cycle. That will save consumers money as it also cuts T-Mobile US revenue for partial months of service.

T-Mobile US might also change the way it bills for devices purchased on installment plans, billing in equal installments from the time of the first bill, rather than starting to collect on device installment charges sometime after the first full month of service.

That has the effect of providing consumers a “true” sense of recurring charges, at least until the device is paid off.

T-Mobile US also could announce full, and simple, device unlocking.Those are initiatives taken by a firm that believes it might remain a stand-alone company.

Needing additional spectrum assets in lower frequencies, T-Mobile US also is seeking to buy 700-MHz spectrum from existing license holders. Again, that is a move a firm might take if it believed it might continue to compete as a stand-alone firm.

As with so many other elements of business strategy, T-Mobile US might also assume now is the time to lock up such spectrum in the 700-MHz band because the other likely buyer--AT&T--is preoccupied with its bid to acquire DirecTV.

In April, T-Mobile US bought $3.3 billion worth of such spectrum from Verizon, covering about half the T-Mobile US footprint. So now T-Mobile US needs to fill in the other half.

Most of that 700 MHz A-band spectrum is owned by 33 relatively small carriers.

To be sure, T-Mobile US might believe there are other potential buyers, including Dish Network, that might be able to structure a transaction that passes antitrust review and could get Federal Communications Commission clearance.

An acquisition of T-Mobile US by Dish Network  would not reduce the number of leading national service providers from four to three, for example, and therefore would not further concentrate the market.

But this time around, T-Mobile US is acting as though it is unwilling to put its future into the hands of regulators and would-be buyers. It is behaving as though it has to have a serious “plan B” or “plan C.”

Plan C is founded on the continued independence of T-Mobile US.
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