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The Department of Justice doesn’t want to see AT&T end up with T-Mobile, but would it stop Sprint Nextel from making such an acquisition? What about MetroPCS or Leap Wireless?
Earlier this week, the DOJ stunned many people in the wireless industry when it filed suit against AT&T to stop its $39 billion acquisition of T-Mobile USA. The agency said that allowing AT&T to buy T-Mobile would likely result in higher prices and a loss of innovation in the wireless market.
The news has sparked speculation about what will happen to T-Mobile if the government is successful in putting the kibosh on the deal. In this week’s Ask Maggie, I explain why it would be hard for either of the other two major wireless carriers–Sprint Nextel or Verizon Wireless–to buy T-Mobile. And if by chance one of them did buy T-Mobile, or one of the smaller CDMA players bought it, I explain why T-Mobile will likely stay true to its GSM roots.
I also explain why I think Google’s Nexus S doesn’t support T-Mobile’s Wi-Fi Calling app. And I offer some advice to a disgruntled HTC Thunderbolt user who keeps getting a lemon from Verizon.
Ask Maggie is a weekly advice column that answers readers’ wireless and broadband questions. If you’ve got a question, please send me an e-mail at maggie dot reardon at cbs dot com. And please put “Ask Maggie” in the subject header.
Staying true to GSM
Dear Maggie,
It looks like the AT&T’s merger with T-Mobile may be dead. And you point out in another one of your articles that T-Mobile may have to work merge with someone else to stay afloat. So my question to you is, if T-Mobile merges with a CDMA carrier, do you think it would continue to support GSM/WCDMA technology, which is important for international travelers?
Thanks for your response
Charles
Dear Charles,
That’s a good question. First of all, I don’t see a way in which T-Mobile will be able to merge with any of the other big four wireless carriers in the U.S. The main argument by the Department of Justice against the merger with AT&T is that the company is a valuable fourth player in the wireless market. It’s a maverick that has led the industry in innovative new technology and low-pricing.
So it would be hard for the DOJ to justify allowing Sprint Nextel or Verizon Wireless to buy the company. Verizon is the No. 1 wireless carrier in the country. Sprint might have a better chance given that it’s a distant No. 3 in the market. Sprint might be able to effectively argue that together it and T-Mobile make a stronger competitor to offset AT&T and Verizon, which combined have more than 60 percent of the subscribers in the U.S. Sprint and T-Mobile have been losing customers while AT&T and Verizon have been adding customers.
Regional operators Leap Wireless, which owns the Cricket brand, and MetroPCS are CDMA carriers, and I suppose they could be potential acquirers. A deal with either of these companies would likely have an easier time getting regulatory approval, since they don’t have national footprints.
But you are right. The technology is an issue. It’s not easy to integrate two different networks that use different technologies. Sprint has already been down this road. And its 2005 acquisition of Nextel has become a cautionary tale for any wireless carrier thinking of merging. The two companies used fundamentally different technologies for their networks, which has resulted in a long and painful integration process.
Converting T-Mobile into a CDMA carrier would be hugely expensive. And honestly, it wouldn’t make much sense. T-Mobile’s advanced GSM/WCDMA network is faster than either Verizon’s or Sprint’s EV-DO networks. And it’s definitely faster than anything either MetroPCS or Leap has deployed. As you indicate, GSM/WCDMA is used more widely throughout the world. So my guess is that if a CDMA carrier bought it, the company would run T-Mobile as a separate network and possibly sell new phones with CDMA and GSM technology built.
Eventually, the distinctions between CDMA and GSM won’t matter much because all the major wireless carriers will migrate to the same fourth generation of technology known as LTE. Verizon has already been building its network. MetroPCS has also launched LTE in a few cities. Sprint hasn’t announced plans for an LTE network yet, but the company is expected to outline a plan for LTE deployment in early October.
T-Mobile has said it will eventually support LTE. But the company doesn’t have any new spectrum to build that network. It’s talked about reusing and refarming some of its existing spectrum, but that’s a process that takes a long.
4G is important to all the carriers. Not only will it offer customers faster speeds, but it also offers a leap in network efficiency. 4G LTE uses spectrum more efficiently than 3G technologies, such as the HSPA+ network that T-Mobile has deployed. The same was true when 2G networks transitioned to 3G. When subscribers with smartphones and tablets and other connected devices start dumping more traffic on the network, the wireless operators will need more efficient networks to keep up with demand and control their network costs.
So eventually all carriers, even T-Mobile, which doesn’t have enough data users right now to exhaust its current network, will need 4G to cope with these demands in the future.
I want my T-Mobile Wi-Fi Calling!
Hi Maggie,
I bought an unlocked Nexus S and use it on T-Mobile. I live in a high-rise apartment where my GSM signal is unstable. And I’d really like to be able to use the Wi-Fi Calling app to make phone calls using my home Wi-Fi on my phone. Why won’t T-Mobile offer its Wi-Fi Calling app (UMA) for the Google Nexus S phone? They offer it for the Samsung Galaxy S, which is essentially the same phone. And they offer it on several other Android phones, but they don’t offer it on the Nexus S. What gives?
Thanks,
Eddie
Dear Eddie,
Here’s the deal. There is no technical reason why the Wi-Fi Calling app cannot be preloaded onto any Android phone, according to Kineto Wireless, the company that has designed the app for T-Mobile.
So I don’t have a good answer for why it’s not included on the device. Kineto has a deal with T-Mobile. And it makes the app available to handsets that T-Mobile says it wants to have the app.
The Nexus S is not a T-Mobile phone. It’s a Google device. And Google gets to decide which apps are on it and which are not. To the best of my knowledge, none of the carriers, including T-Mobile, have input as to what features or apps are included on the Nexus devices. That is strictly under Google’s control.
Kineto hasn’t said it, but I’m sure if Google asked the company to add the app, it would.
So why isn’t Google asking for it? That’s a good question. And to be honest I don’t know the answer to that. But if I were to speculate, I’d say it’s likely because Google views the Nexus devices as a platform to highlight and promote Google apps and services. Wi-Fi Calling is a service offered by the carrier, so it’s not really a Google app.
I know it’s not the same, but there are voice-over-IP apps you can use to make phone calls over Wi-Fi. For example, you can use the Skype app for this. It won’t give you the same exact experience as the T-Mobile UMA service, which allows you to seamlessly roll on and off the cellular network to the Wi-Fi network. And it won’t allow you to use you’re existing phone number. But it could help you make phone calls when you can’t get a T-Mobile signal.
Defective smartphones
Hello Maggie,
I am a Verizon customer who purchased the HTC Thunderbolt when it first came out. Over time and particularly within the last two months, I have had the phone replaced with a “like new” device several times. Each time I return it, I get another “like new” phone. And it never works right. How many times does a customer have to wait until they can get a brand new phone? Is this a breach of contract with Verizon if they cannot provide me with a reliable phone? Can I get a brand new phone after a certain time? Can I get out of my contract? I need help.
Thanks,
Michael
Dear Michael,
Verizon’s policy is to replace defective devices with “Certified Like-New Replacement” devices during the manufacturer’s warranty. I asked Michael Aschenbrener, an attorney who specializes in consumer and small business legal issues, about your situation. He said you probably can’t get out of your contract without a penalty even if each subsequent replacement is defective.
The reason why is that Verizon, like most carriers that perform warranty exchanges for their subscribers, is really doing each customer a favor by even doing the exchange for you.
“With most gadget purchases, you have to go to the manufacturer for replacements,” he said. “Wireless carriers in the U.S. generally do this for you, but they do it on their terms by sending you refurbished devices.”
If you are truly unhappy with the “like new” products Verizon keeps giving you, you can go to the manufacturer, which in this case is HTC, to get a replacement under HTC’s warranty.
And if that still doesn’t satisfy you, Aschenbrener suggests escalating your problem within Verizon. The company doesn’t want to keep exchanging your phone either. It costs them time and money. So you can ask to speak to a manager at a store or get a supervisor in customer service on the phone, and perhaps then the company will offer you a new phone or a different model of phone.
And if all else fails, Aschenbrener recommends making a serious threat to cancel service. He said that often gets results.
For more information about Aschenbrener’s law practice and how helps consumers check out his Website: www.aschenbrenerlaw.com.
