Tencent Technology News (macho) Beijing time on November 26, according to the Reuters news website reported on Friday, due to concerns about the destruction of the United States mobile operating market competitive environment, the United States regulators are trying to prevent AT&T to complete the $ 39 billion acquisition of German telecom's T-Mobile United States deal. But the irony is that if the deal fails, it could hurt the interests of smaller U.S. mobile carriers even more.
Once the deal fails, T-Mobile America will receive a significant break-up fee from AT&T, which will push T-Mobile America to become a stronger, more aggressive force in the U.S. mobile operations market. Analysts point out that, after its own strength alone, T-Mobile United States is difficult in the United States Mobile Operation low-end market to occupy a place of their own. Currently, the market is dominated by Sprint Nextel Corp., the third-largest mobile operator in the United States. And small wireless carrier, MetroPCS Communications Inc.And controlled by Leap Wireless International.
Enhancing T-Mobile's capabilities
Jim Breen, an analyst at US investment firm William Blair, said: "once the clouds over the takeover deal fade away, T-Mobile USA will become a stronger and more formidable force in the mobile operations market, as the company will likely improve the quality of its communications network through wireless spectrum assets from AT&T.”
AT&T's acquisition of T-Mobile in the United States, the world's largest publicly announced deal this year, has been met with a boycott by the U.S. Department of Justice and the Federal Communications Commission(FCC)over concerns that a merger of the two companies would seriously undermine the competitive landscape of the U.S. mobile operating market.
AT&T has announced that it has temporarily revoked the filing with the FCC and said it will move to seek approval for the deal from the U.S. Department of Justice. The company also announced one-time spending of $ 4 billion for the quarter as part of the breakup fee.T-Mobile America will receive $ 3 billion in cash and $ 1 billion in wireless bands from AT&T if the deal fails, according to a merger agreement between the two parties.
U.S. ratings agency Moody's(Moody's)said in a recent report that the break-up agreement will allow the two companies to reach a network-sharing deal, citing " AT&T's transfer of the wireless band to T-Mobile in the United States and the 3G network roaming agreement reached between the two sides will be significant for T-Mobile”
Threat to Sprint
The result will make Sprint, the third-largest mobile operator in the United States, a struggling company that has been a fierce opponent of AT&T's acquisition of T-Mobile in the United States. Sprint has filed a legal action in U.S. District Court to block the deal.
William Blair analyst Jim Brien predicts that this may be due to a similar crossover between Sprint and T-Mobile in the United States. Sprint will have to compete with T-Mobile's attractive post-paid service prices in the United States, a move that will inevitably lead to a decline in the company's average per-subscriber revenue.
“In terms of attracting new mobile subscribers, Sprint will no longer be the only carrier in the market to offer postpaid premium services, " Bryan said.”
Impairment of interests of small operators
T-Mobile in the United States is also targeting a similar user base in the small mobile operating market, so small American mobile operators such as MetroPCS and Leap Wireless will also be seriously affected. Because once AT&T's deal to acquire T-Mobile America fails, T-Mobile America will become a much tougher competitor for these small mobile carriers in the urban prepaid consumer market.
At the same time, MetroPCS and Leap Wireless will also lose the opportunity to acquire some of T-Mobile's US assets. To get the support of U.S. regulators, AT&T would have to divest some of T-Mobile's assets in the United States.
Analysts had speculated that AT&T might help MetroPCS become the fourth-largest nationwide mobile operator in the United States in order to lessen the Justice Department's concerns about the deal. But MetroPCS made it clear that the company had no intention of becoming a national operator.
Spokespeople for MetroPCS, Leap Wireless and Sprint did not immediately respond to requests for comment.
Moody's said the nation's largest mobile operator Verizon Wireless would be a beneficiary of the deal. As AT&T and T-Mobile put most of their efforts to salvage the deal, Verizon Wireless has gained valuable time to deploy its own strategy