Media, Business & Politics

AT&T’s strongest argument for the need for the T-Mobile merger was that it was neccesary for them to be able to exten 4G coverage from 80% to 97% of the country. But in a leaked document, they had previously estimated it would cost $3.8 billion to do exactly the same thing without T-Mobile — they just decided at the time that it wasn’t worth the investment due to a lower ROI per subscriber! That, compared to the $39 billion AT&T was offering for T-Mobile. Note, there’s a decimal point in the first number, but not in the second. Funny that AT&T was not willing to spend the cash to build out their network themselves, but they are willing to pay 10x more to get that same coverage via the T-Mobile merger. So, now that AT&T’s strongest argument for the merger has been proven completely untrue, it’s obvious AT&T only wanted T-Mobile to kill the competition and continue their tradition of raising prices.

If this merger had gone through, we would have lost T-Mobile’s option for $5 unilmited texting plans, left with only AT&T, Verizon and Sprint — all at $20/mo. Data plans are similarly much cheaper at T-Mobile. For instance, what I’m paying AT&T $85/mo for right now, T-Mobile is offering for $50! That’s $35/mo less! So if T-Mobile gets the iPhone this time around, even if they were to offer it unsubsidized for $600, over a 2 year contract it’s a savings of $240 over AT&T. If you use the phone for longer than that, you’re gaining $35/mo over what you’d still be paying AT&T, since they don’t offer you a discount even after you paid off all the subsidies on your phone. (and don’t forget the resale value of an iPhone, although that’s no difference which carrier you’re on).

This, folks, is why Capitalism in its truest form – free from regulation – does not work. And if T-Mobile does get the iPhone, they might have a fighting chance to stay in the game with the big boys.

DSLReports.com: AT&T Blows Smoke to Cover Leaked Document Snafu

This entry was posted on Wednesday, August 31st, 2011 at 2:45 pm and is filed under Big Business, Big Media, Communications, Consumer Fleecing, Internet Service, Wireless Service. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.