T-Mobile Subscribers Have Fled

AT&T will undoubtedly file its own lawsuit in the wake of the U.S. Department of Justice lawsuit opposing the purchase of T-Mobile USA on antitrust grounds. The Federal Communications Commission, for its part, also must approve the deal, and hasn't spoken yet.

T-Mobile will gain from a deal failure, to the tune of $6 billion, including $3 billion in cash, spectrum rights and roaming agreements with AT&T. But T-Mobile's fundamental problem--that it is a rather weak fourth contestant in a market lead by AT&T and Verizon Wireless, will not change. When all is settled, relating to the proposed AT&T take-over, it is conceivable T-Mobile USA will continue to face strategic issues, adding yet another element of uncertainty to the U.S. mobile business.

T-Mobile’s revenue and total subscribers took a hit from April to June 2011, as the carrier’s pending merger with AT&T apparently drove away customers.

The Bellevue, Wash.-based carrier’s revenue dropped only slightly in the second quarter, but the company’s profits fell by nearly half from the same period last year. T-Mobile also reported it had lost 50,000 customers, bringing its total to 150,000 lost for the year. The carrier lost just 56,000 subscribers in all of 2010.

T-Mobile has made several moves to attract new customers and hold onto existing ones over the past several months. The carrier increased its 4G network to reach 170 million consumers in the U.S., came up with special offers like one year of free data for new subscribers and even brought back unlimited data options to differentiate itself from AT&T and Verizon. Despite T-Mobile’s efforts, however, customers still leave the carrier in droves.

T-Mobile Subscribers Flee as AT&T Merger Looms

AT&T Break-up Fee is $6 Billion

AT&T will have to pay Deutsche Telekom $6 billion as a break-up fee in case the Department of Justice lawsuit opposing the purchase of T-Mobile USA fails to gain regulatory approval, as it now has.

The $6 billion break-up fee would include $3 billion of cash and about $2 billion worth of spectrum, plus a roaming agreement valued at $1 billion.

T-Mobile USA appears to have been doing little over the past several months other than preparing to be acquired, losing customers and marketing focus. If the deal falls through, as now seems likely, it will gain spectrum it needs for 4G services, plus cash and roaming rights, but still will be a lagging number-four player in the U.S. market.

AT&T break-up fee is $6 billion

U.S. Files Antitrust Complaint to Block AT&T, T-Mobile Merger

The U.S. Department of Justice, whose approval is necessary for AT&T to buy T-Mobile USA, has filed a lawsuit to block the $39 billion acquisition of T-Mobile USA, saying the deal would “substantially lessen competition” in the wireless market.

The Justice Department complaint was filed Aug. 31, 2011 in federal court in Washington, D.C.. The U.S. is seeking a declaration that Dallas-based AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law and a court order blocking any arrangement implementing the deal.

“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the DoJ said in its filing.

U.S. DoJ Files Suit to Block AT&T, T-Mobile Merger

Dept. of Justice to Block AT&T Purchase of T-Mobile USA Deal?

There are new rumors that the U.S. Department of Justice will definitely oppose the AT&T attempt to purchase T-Mobile USA. If the DoJ does not clear the deal on antitrust grounds, it is not yet clear what other alternatives might be available to craft a deal that would gain approval. More to follow.

Amazon Could Launch 7-Inch and 10-Inch Tablets

Amazon’s rumoured venture into the tablet market will reportedly see it launch two models – a seven-inch Android tablet due to start shipping in October and a larger 10-inch model which is expected to go into mass-production in the first quarter of next year, Digitimes reports.

The strategy would seem to indicate that Amazon is covering its bases. Many e-reader users who have experience with both lighter seven-inch devices and the larger 10-inch devices say it is easier to read on a seven-inch device. But many users may want the e-reader application, but intend to use the tablet more generally, in which case, larger screens are better.

Piper Jaffray analyst Gene Munster has predicted that an Amazon Android tablet would perfectly compliment the retail giant’s existing Kindle devices to help the company sell as many as 2.4 million portable devices in 2012.

Although Amazon has yet to confirm it is working on a tablet device, industry analysts and component suppliers have already provided insights into the company’s Android tablet, suggesting that the company could also be working on a mobile handset.

Munster bases his predictions on a recent report by Creative Strategies analyst Tim Bajarin, suggesting that Amazon could release a 10-inch tablet, and possibly a seven-inch tablet, at the end of this year to coincide with the holiday season. Most observers think Amazon will offer subsidized versions intended to entice consumers to buy Amazon content.

Amazon's tablet strategy could see 2012 launch for 10-inch model:

Context a Key Feature of Mobile App Use

The smart phone is an unusual consumer device in that it is unusually well suited for development and use of all sorts of location-aware applications, allowing features and content to be customized for the actual user context.

Twitter Boosts D.C. Policy Representation

Twitter is taking a highly profile in the Washington, D.C. lobbying scene by hiring of telecom policy veteran Colin Crowell, on top of earlier moves to bulk up its regulatory and legislative staff inside the Beltway. Twitter expands its D.C. presence 


In doing so, Twitter joins other technology firms that in recent years have discovered the importance of regulatory and legislative influence, something telecom and cable firms always have understood.

But the importance of policy is new for the technology industry, a matter of basic importance for telecom and cable companies. Look at Google's various entanglements. Google has faced  a broad U.S. antitrust probe of the company's practices.


Last week, federal prosecutors who had investigated Google's practice of allowing ads from illegal online pharmacies on its Web search engine between 2003 and 2009 singled out Mr. Page. They said he had personal knowledge of the alleged crime and failed to prevent it. The federal prosecutors made their comments after Google paid $500 million last week to avoid criminal charges.


In April 2011, the government approved Google's purchase of ITA Software. In past years, Google has advocated for changes in spectrum policy as well. 

Google faces numerous policy challenges