T-Mobile US Has Plan B and Plan C

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“Won’t get fooled again” is how some might characterize T-Mobile US strategic actions, in advance of a possible Sprint acquisition effort.

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.

Needing additional spectrum assets in lower frequencies, if it has to operate as an independent company, T-Mobile US is seeking to buy such frequencies from existing license holders.

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. 




Edited by Maurice Nagle

Contributing Editor

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