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In this edition of Views and News, we examine Sprint's decision to accept a $20-billion investment from Japanese telecom firm SoftBank for a 70% controlling interest in the US number three wireless carrier. We also look at Apple's new iPad Mini and the competitive advantages it brings to the very largest wireless carriers.
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Sprint on the block
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Just one year ago, Sprint was ringing alarm bells, warning of the dangers of the proposed merger between AT&T and T-Mobile. Sprint was perhaps the most vociferous opponent of the merger, and for good reason: AT&T's takeover of T-Mobile was bad for consumers and bad for Sprint. AT&T scrapped its merger plans in the waning days of 2011, leaving the market structure for wireless services in the US largely unchanged.
Fast forward to October 12, 2012. Japanese telecommunications conglomerate SoftBank announced that it will be acquiring a controlling, 70% interest in Sprint in a deal valued at $20.1-billion. The Sprint/SoftBank deal differs in many important respects from AT&T's attempted takeover of T-Mobile – the deal does not increase market concentration in the US nor eliminate a low-cost provider. Sprint's deal is optimistically scheduled to close in the second quarter of 2013, considerably shorter than the time frame that had been contemplated for the AT&T/T-Mobile deal, reflecting great optimism that the necessary regulatory approvals will be gained quickly and painlessly. However, there are elements of the proposed transaction that will almost certainly draw scrutiny, and it is very likely that AT&T (and others) will jump at the chance to vocally question and challenge the Sprint deal.
Continue reading at econtech.com
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Apple's iPad Mini and implications for wireless competition
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It was Apple's second special event of the fall, and there really wasn't any doubt as to what product was going to be announced: the new iPad Mini. With prices ranging from $329 to $659, the 7.9 inch tablet fills the size gap between the iPhone and full sized iPads. Just like its bigger brother, the iPad mini comes in several "flavors" and users can choose between a wifi-only model, and one that comes with 3G/4G cellular capability. That this iPad offers cellular data capability isn't newsworthy in and of itself, but Apple's pricing and configurations highlight some interesting issues affecting wireless competition.
Continue reading at econtech.com
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About ETI. Founded in 1972, Economics and Technology, Inc. is a leading research and consulting firm specializing in telecommunications regulation and policy, litigation support, taxation, service procurement, and negotiation. ETI serves a wide range of telecom industry stakeholders in the US and abroad, including telecommunications carriers, attorneys and their clients, consumer advocates, state and local governments, regulatory agencies, and large corporate, institutional and government purchasers of telecom services. |
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