Enterprise buyers weigh in on outlook for AT&T/T-Mobile union
It’s been a week of intense speculation over the fate of the U.S. mobile landscape, should AT&T’s proposed takeover of T-Mobile USA actually pass regulatory approval. The move, significantly, would reduce the number of players with GSM-based networks in the U.S. to one.
What do buyers of business mobility services have to say? Well, some are skeptical that the deal will go through. But if it does, most believe prices will go up and that AT&T will have less incentive to make enterprises happy. Still others can find a silver lining or two and even offer up some creative ideas for Sprint Nextel.
ANALYSIS: AT&T’s $39B T-Mobile buyout raises regulatory, competitive and customer service questions
Chris Nowak is the CTO at Anthony Marano, a Chicago produce wholesaler that has used T-Mobile Unlicensed Mobile Access (UMA) calling and AT&T services for many years.
“Prices are going to go up, that’s all,” he sighs. “[The merger] makes sense, because [the two networks use] common technology. But it’s hard to believe it’ll get approved from a regulatory standpoint.”
He points to what he calls progressiveness in Europe, where GSM is used everywhere. With an AT&T/T-Mobile union, “In the U.S., we’re going to take the operators that use the same technology and kill the competition.”
In other words, if you are based in the U.S. and want a GSM world phone, you’ll have just one supplier.
Fred Archibald, computing infrastructure and network manager at the University of California-Berkeley, agrees. “My first reaction is that one fewer carrier means less competition, and prices will go up for everybody.”
And while Archibald believes much of the innovation going on in the mobile industry lies with ecosystem players other than the carriers, he agrees with Sprint CEO Dan Hesse, who has indicated that fewer players stall innovation.
“Big companies are like big ships. They don’t turn on a dime,” Archibald says. “The fewer there are, the less hard [the carriers will] try on all sorts of service-level fronts.”
On the other hand, “Having fewer moving parts theoretically should make life easier.” He explains that universities work to be carrier-agnostic, given the wide mix of clients and providers students use that the university doesn’t control. One less carrier would require one less cell-boosting system and permission to use it.
For his part, Jeff Mazzabufi, telecom manager at Hubbell Inc., has always divided his mobile network service contracts between the two biggest players, AT&T and Verizon, to keep each on their toes.
Mazzabufi hopes a merger would give AT&T an instant footing in 4G networking via T-Mobile’s HSPA+ footprint, “which would be a benefit to us.”
On the flip side, he says, “We’re worried about what AT&T dominating the GSM market will do to cost.” He says he already finds AT&T’s prices higher than those of Verizon Wireless.
David Schofield, director of wireless mobility at global telecom advisory company Alsbridge Inc., in Gainesville, Ga., negotiates mobile deals for lots of enterprises.
“We’re already seeing other carriers digging in their heels with pricing this week. They’ve already adopted the attitude that ‘There’s two of us; if you don’t like our prices, go to the other guy, where you won’t do any better. ‘”
Schofield says T-Mobile has always been a tough business sell because of a general corporate perception that T-Mobile lags the other big three. On the other hand, he says one client recently moved off Sprint to T-Mobile for field service workers that needed occasional contact throughout the day, but not constantly in real time. That company, he said, cut its mobile costs by almost half.
Schofield also sees the potential merger as an opportunity for Sprint.
“I think [Sprint] will pick up a lot of T-Mobile customers who won’t want to pay AT&T rates and will move,” he says.
He also suggests that Sprint should seriously consider teaming with LEAP/Cricket Wireless, MetroPCS, U.S. Cellular and other regional carriers to create an über competitor. A particularly good idea would be to get an international partner to enable end-to-end machine-to-machine (M2M) support, which is where the growth opportunity lies going forward.
“I think that’s what’s going to happen,” he says.
