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I am an every day joe just like you. I have recently quit my job so that I can go back to school, and am leaning towards Web Development/Design or Software Engineering as my desired career.

Monday, May 5, 2008

Sprint: T Mobile and the Pile on

So, everyone is piling up on Sprint. I think that Sprint CEO Dan Hesse is probably thinking right now, man can I get a break. A lot of people thought that Hesse could be the man to right the ship for Sprint but the problem may be that he is just too late. Gary Forsee while running this company apparently while doing war with the other cell carriers decide to turn the canon towards his own ship and blew a hole in the bottom. Now Hesse is the captain but there may not be enough buckets on deck to get the water out before the ship sinks.
1. Sprint vs. the FCC-The FCC is wanting Sprint to clear some airwaves for emergency systems. The agreement was to give Sprint some replacement spectrum, but the problem is that Sprint is expected to give up spectrum and wait on getting some back. This can be bad for Sprint's customers.
2.I could not find the article but Sprint is being sued (possibly reaching class action status) for some shady actions with stocks, the announcement last year of 30 billion dollar loss, and some board members. This is not a problem that you want to have.
3. They are being sued by Verizon for not paying up on some cash.

I am sure there are other things that I am not talking about but things just seem to get worse.

Enter T Mobile. Deutsch Telekom, the owners of T Mobile, are eying the possibility of buying Sprint. Many people are wondering why they would consider this. Most believe that this would be a bad idea. I however do not think so. I will tell you why.

Sprint is in trouble because they are being hit from every angle. They just had their credit rating dropped, and they are going to have a hard time pulling out. They are on the right track with the Simply Everything plan, Wimax, and Q Chat/Direct Connect. The problem is will they be able to last long enough to get these services out there at a high level. They are also having a hard time coming up with the money to put Wimax in place. They are seeking partners for Wimax but they keep hitting snags with deals with Clearwire as well as several US cable operators.

Let's look at T Mobile. Keep in mind that T Mobile is owned by Deutsch Telekom, and they are a very large company. T Mobile's biggest problems here in the US are lack of 3g and lack of coverage, however, their are much ballyhooed for their customer service.

Let's compare their strengths and weaknesses. Sprint has a huge 3g EVDO network, good CDMA coverage with roaming agreements with Verizon, Direct Connect (some may think the novelty of direct connect is going away, but if that is the case, why is Verizon launching a new DC service as well?)and they are trying to push out the first 4g network with Xohm (wimax technology.) They also have wretched customer service. T Mobile is way behind is way behind on 3g. Their voice network is not that great. They have excellent customer service and a lot of equity.

Deutsch telekom is a big enough company that it can afford to drop some dimes here and there. They have a past of good customer service and would probably have the means to fix this. They could continue to push EVDO and the transition over to Qchat in order to have Direct Connect. They would not have to have all of their members have dual CDMA and GSM phones, and let's face it they will not be doing away with CDMA or GSM overnight due to the number of subscribers they already have. They could maintain all 3 networks and focus on phasing out the Iden network while pushing EVDO and migrating iden customers over to qchat. They would keep Sprint and T Mobile as separate entities but utilize the T Mobile upper brass to tweak and fix the problems. The goal would to make Sprint viable again.

Also, with this time in the industry bing very important to 4g plans you could look for both companies to transition into 1 technology, whether they decided to keep Wimax on track and be the first out with 4g or dump it completely and go to LTE like everyone else seems to be doing. With this transition you could merge into 1 network and have ALL of the towers that both have. This would make the 1 company stronger because of the combined network coverage but under one technology. This would be the point that the 2 companies start to become one.

Keep in mind that this would also be tough to get passed by regulatory committees due to the fact that this would put the combined company as the largest US cell phone carrier, and it would be owned by a foreign company.

There are hurdle to overcome but this could be great for both companies. Keep in mind if you were to sign a contract with Sprint today, the chances are nothing will change before your contract is up. DT is just now eying Sprint and there are no offers on the table as of yet. Both companies would have to agree on terms, and then the government would have to approve everything. If all of that happens how long would it take to launch a new 4g network. I am guessing if this ever comes to fruition you are looking at 3years minimum before these to really start getting together. Although the benefits for Sprint customers could be almost immediate.

1 comment:

Anonymous said...

tmobile's voice network is great you stupid dumbass. they dont have 3g established but their voice networks have no issues. they might've had problems when they got off the ground but thats the issue every carrier faced. .je.